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**FEBRUARY 9, 2021**

Meyerson on TAP

The Fight for $15 Is Looking Good

The numbers on the effects of raising the federal minimum wage to $15
are all over the map, but newspaper accounts have tended to emphasize
those that are flatly wrong, as my colleague David Dayen has documented
.
The headlines feature the Congressional Budget Office's estimate of
the raise costing 1.4 million jobs. The first paragraphs tend to mention
that the CBO's count of Americans who'd be lifted out of poverty is
less than that: 900,000. You have to scroll down to learn that the CBO
also finds that the raise would boost the incomes of 17 million
Americans, and most probably 27 million Americans-that is, close to a
fifth of the entire American workforce.

Let's unpack those numbers. Seventeen million is the number of our
compatriots currently employed at wage levels below the new rising
minimum (the raise is phased in over the next four years; the first
raise, to $9.50, would take effect next year). The additional ten
million workers are those who make just above the minimum, whose wages
would almost surely be increased, too. The 900,000 is the number of
workers whose income is almost exactly at the level at which we
officially designate poverty. A great many poor workers are beneath or
above, rather than precisely at, that level, which doesn't mean that
they're not poor, and does mean they would still see their incomes
boosted appreciably by the raise.

As to the 1.4 million, that estimate is 300,000 greater than the CBO's
2019 estimate, and one that a number of economists who specialize in the
minimum wage's effect believe is too high. It's worth pointing out
that every single hike in the minimum wage has seen some economists
predicting it will cost too many jobs, a prediction that dates back to
the 1938 enactment of the first federal minimum wage. Of course, since
1938, the number of employed Americans has grown by well over 100
million, despite repeated hikes in the minimum wage. Somehow, despite
these serial encroachments on the sanctity of laissez-faire labor
markets, we have managed to plod along.

Finally, the CBO also estimates that raising the wage to $15 will raise
the federal deficit by $54 billion. Again, you have to scroll down to
find that that figure is for ten years. Annualized, it comes to $5.4
billion, out of a total yearly federal budget that's a little more
than $3 trillion, and that is likely to rise over the course of that
same next decade. In other words (more precisely, in other numbers), it
comes to an increase of about 0.2 percent (if you prefer words,
two-tenths of one percent) of federal spending.

The CBO's numbers focus on such matters as the increased costs to the
federal health insurance programs likely to come from such horrors as
paying hospital orderlies more. Other economists, led by Michael Reich
at UC Berkeley (home to the most empirically grounded economics
department), have estimated that the federal deficit will actually
shrink as the raise will lead to an increase in federal tax revenues and
a decrease in such poverty alleviation programs as food stamps.

Either way, though-whether the change increases or decreases federal
spending and outlays-it certainly affects the federal budget, which is
why the raise should be included in the reconciliation bill the
Democrats are advancing. And while Joe Manchin might reject a
freestanding bill raising the wage to $15 (after all, there are no poor
people in West Virginia), it would be a whole lot harder for him to
reject an omnibus relief bill that included that provision.

The Fight for $15 may yet prevail.

~ HAROLD MEYERSON

Follow Harold Meyerson on Twitter

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