In a brief, researchers at the left-leaning Economic Policy Institute noted potential upsides for workers the CBO report highlights. They pointed out that the estimates show the policy would benefit 27 million workers and increase wages by $333 billion between 2021 and 2031, with much of the added income flowing to lower earners.
The $333 billion figure is based on estimates that the policy would result in $509 billion of higher hourly pay, which would be offset by $175 billion in wage losses due to fewer jobs.
EPI’s experts disagreed with CBO’s estimates on how the wage policy could hurt employment. “We believe that the CBO’s assumptions on the scale of job-loss are just wrong and inappropriately inflated relative to what cutting-edge economics literature would indicate,” they wrote.
Route Fifty
February 9, 2021
Increasing minimum pay levels “would disproportionately raise the incomes of families at the bottom of the income distribution and would meaningfully reduce the number of families in poverty,” the Economic Policy Institute said in a recent paper.
CNBC
February 9, 2021
Congress last passed a minimum-wage increase in 2007. The current federal minimum, $7.25 an hour, is about 29 percent below its 1968 peak when adjusted for inflation, according to the left-leaning Economic Policy Institute. David Cooper, an economic analyst at the institute, said 29 states and the District of Columbia have higher minimums, and seven states plus the District of Columbia were phasing in the $15-an-hour threshold.
Progressives see the wage increase as a central weapon for fighting poverty and inequality, while conservatives often warn it will reduce jobs.
The report in essence said both sides were right. It found a $15 minimum wage would offer raises to 27 million people and lift 900,000 people above the poverty line, but it would also cost 1.4 million jobs.
Mr. Cooper disputed the jobs forecast, arguing that it was out of line with recent studies that showed increases in the minimum wage had produced little or no effect on employment. “C.B.O. seems to be going in the opposite direction,” he said.
The New York Times
February 9, 2021
But I can hear you supply-siders out there asking whether that gain is offset by lower tax revenues from the wealthy. The short answer is “not really.” The CBO believes that, ultimately, the bill for a minimum wage hike would be paid by higher-income people. According to a blog post by several economists at the left-leaning Economic Policy Institute, income losses would be concentrated, under the CBO’s analysis, on families whose average income is $232,800 (actually a little bit more, because that’s in 2018 dollars).
The New Republic
February 9, 2021
Another study from the left-leaning Economic Policy Institute found the wage hike would reduce expenditures on public assistance programs by $13.4 billion to $31 billion and boost payroll tax revenue by $7 billion to $13.9 billion.
“The bottom line is that the CBO finds that the benefit to low-wage workers of raising the minimum wage far outweighs the cost,” said Heidi Shierholz, a senior economist and director of policy at EPI, on a Monday call with reporters.
CNBC
February 9, 2021
Heidi Shierholz, director of policy for the labor-backed Economic Policy Institute, said the CBO’s estimates of job losses “are highly questionable” and gave too much weight to inferior studies used in its analysis. Those exaggerated claims of job losses, she said, in turn results in higher projected costs for the government.
And even if those costs are accepted, she said, the benefits would be “enormous” in terms of reducing poverty and inequality.
Roll Call
February 9, 2021
But proponents argue that better-quality studies tend to show that increases in the minimum wage do not hurt employment.
“We believe that the CBO’s assumptions on the scale of job loss are just wrong and inappropriately inflated relative to what cutting-edge economics literature would indicate,” said a team of experts from the left-leaning Economic Policy Institute.
The CBO did not properly weight the higher-quality studies in its analysis, said Heidi Shierholz, senior economist at the institute.
CNN
February 9, 2021
Some progressive economists were quick to say the report’s estimates on job losses were too high. The left-leaning Economic Policy Institute released an analysis of the report saying those assumptions “are just wrong and inappropriately inflated relative to what cutting-edge economics literature would indicate.”
Huffpost
February 9, 2021
Socialist Sen. Bernie Sanders, one of the main proponents of the $15 minimum wage, unsurprisingly attempted to do just that, instead citing the left-wing Economic Policy Institute’s estimates. More absurdly, Sanders tried to claim this was good news because it showed that the bill had an impact on the deficit and thus could be passed with a simple majority in the Senate through the parliamentary maneuver known as reconciliation.
Washington Examiner
February 9, 2021
The budget agency’s job-loss projection was viewed as extremely questionable by progressive economists and out of line with recent research on the effects of minimum wage increases. Josh Bivens, David Cooper, Heidi Shierholz, and Ben Zipperer of the Economic Policy Institute wrote Monday that “the CBO’s assumptions on the scale of job-loss are just wrong and inappropriately inflated relative to what cutting-edge economics literature would indicate.”
Common Dreams
February 9, 2021