Washington, D.C. – Today, the Employment Policies Institute (EPI) is highlighting the new Congressional Budget Office (CBO) report which estimates that up to 3.7 million jobs would be lost should a federal $15 minimum wage be enacted. The CBO’s mid-point estimate of 1.3 million jobs lost offsets the 1.3 million worker reduction in poverty, and would mean a net reduction in real family income of $9 billion by 2025.
The report was released in conjunction with the pending vote in Congress of the Raise the Wage Act which would raise the federal minimum wage to $15 an hour and eliminate the tip credit. The CBO’s estimate of lost jobs is broadly consistent with EPI’s earlier estimates, which found up to two million jobs would be lost from a $15 federal minimum wage.
The CBO’s analysis is consistent with recent research on the impact of dramatic minimum wage hikes. In the Bay Area, a report from economists at Harvard Business School and Mathematica Policy Research found a spike in restaurant closures as a consequence of the region’s rapidly-rising minimum wage. In New York City, roughly 6,000 restaurant jobs eliminated just last year–which Crain’s New York Business described as “a sign that steep increases in the minimum wage…are moving owners to reduce staff…” More examples of job loss resulting from higher wage mandates can be found at Facesof15.com.
EPI’s communications director Samantha Summers released the following statement:
“If House Democrats were uneasy about voting on $15 before this week, the CBO report should have them terrified. The CBO provides further evidence of what countless studies have also shown: Raising the federal minimum wage will only hurt those it intends to help, wiping out thousands of starter job opportunities and shuttering the businesses that provide them.”