President Biden says his priority is to create new jobs and he wants to “grow the economy for all Americans.” But look at how the Congressional Budget Office is increasing its proposal for a federal minimum wage of $ 15. The phasing in of this mandatory wage floor by 2025, according to the CBO’s new average estimate, will result in a loss of 1.4 million jobs.
The idle workers would be disproportionately younger and less trained, and CBO projected that half of them would drop out of the workforce. Prices will also rise for goods and services that depend on entry-level labor, such as food prepared in restaurants. “The federal budget deficit until 2031 would increase $ 54 billion,” says CBO, as the government spent more on unemployment benefits and health programs.
Low-wage employees who are lucky enough to keep their jobs will be increased. CBO says 17 million workers will be ‘directly affected’ by the $ 15 minimum, and poverty will be reduced by 0.9 million. “It’s not a free lunch,” he said. Biden and Bernie Sanders do it too. These gains will be costly for young and unskilled who will have a harder time grasping the first step of economic learning.
Even these figures are a guess, since the minimum wage would be set at $ 15, the country would essentially be an economic experiment. This would mean that the urban labor costs of San Francisco and Manhattan would have to be imposed on every extraordinary gas station in rural America. The US economy consists of local and local labor markets with prevailing wage rates depending on different living standards, the type of employers and the availability and skills of the workforce. About 20 countries have a minimum wage that is not higher than the current national minimum of $ 7.25.
The good news is that the $ 15 route through Congress seems bumpy. Mr. Biden told CBS that he was prepared to introduce a $ 15 wage floor in separate legislation, but did not think it would be buried in his $ 1.9 billion Covid account: “It’s apparently not going to happen. due to the rules of the United States Senate. ”