A study by the Congressional Budget Office states that raising the federal minimum wage to $15 an hour by 2025 would increase the pay of at least 17 million people, but also put 1.3 million Americans out of work. The National Club Association advised its members to contact their representative as soon as possible and penned a sample letter as an outline to address each club’s specific concerns.
Raising the federal minimum wage to $15 an hour by 2025 would increase the pay of at least 17 million people, but also put 1.3 million Americans out of work, according to a study by the Congressional Budget Office released July 8, National Public Radio (NPR) reported.
The increased federal minimum could also raise the wages of another 10 million workers and lift 1.3 million Americans out of poverty, according to the nonpartisan CBO, NPR reported. The current federal minimum wage is $7.25 and last increased a decade ago. The budget watchdog’s report comes ahead of next week’s vote in the House of Representatives on a bill to gradually raise the federal minimum to $15 an hour by 2024.
The CBO predicted much bigger job losses than House Democrats, who have pushed for the $15 minimum wage, expected, NPR reported. The study cited “considerable uncertainty” about the impact, because it’s hard to know exactly how employers would respond and to predict future wage growth.
The CBO wrote that in an average week in 2025, 1.3 million otherwise-employed workers would be jobless if the federal minimum wage went up to $15. That’s a median estimate, NPR reported. Overall, CBO economists wrote that resulting job losses would likely range between “about zero and 3.7 million.”
At the same time, the study says the $15 minimum wage would boost pay for 17 million people who would otherwise be earning less than $15 an hour, and possibly for another 10 million Americans who would otherwise be earning slightly more than $15 per hour, NPR reported.
Considering a smaller increase to $12 an hour by 2025, the CBO estimated a boost for 5 million workers and a loss of 300,000 jobs, NPR reported. An increase to $10 an hour would give a raise to 1.5 million workers and would have “little effect on employment.”
The House, controlled by the Democrats, is expected next week to pass the Raise the Wage Act, which would lift the federal minimum wage to $15 gradually by 2024, NPR reported. Its author, Rep. Bobby Scott, D-Va., on July 8 argued that the benefits in CBO’s forecasts far outweighed the costs.
The measure faces a high hurdle in the Republican-controlled Senate, NPR reported. Even so, raising the federal minimum has been picking up steam over the years.
Already, 29 states, the District of Columbia, the Virgin Islands and Guam have set wage standards higher than the federal minimum, NPR reported. Seven states and the District of Columbia are on track to increase their wage minimums to $15 in coming years.
Many economists have agreed that modest increases to wage minimums don’t cause huge job losses. That theory was shown in a high-profile paper by David Card and Alan Krueger, NPR reported. The CBO wrote: “Many studies have found little or no effect of minimum wages on employment, but many others have found substantial reductions in employment.”
The National Club Association advised its members to contact their representative as soon as possible to “let them know the devastating impact doubling the minimum wage will have on your club’s operations.”
If the bill were to pass, the wage would be lifted shortly thereafter to $8.55 an hour and increase each year until reaching $15 an hour in 2025, NCA wrote. After that the wage will increase automatically. The nonpartisan Congressional Budget Office estimates the minimum wage will reach $16.82 in 2029 and keep going up each year.
In addition, the bill would gradually eliminate the federal minimum cash wage for workers who receive tips, the separate minimum wage for teenage workers and workers with disabilities, NCA told its members.
NCA drafted a sample letter that members can quickly send to their representative with directions to add specific examples of how doubling the federal minimum wage would impact their club. Click HERE to view and modify the letter.