President-elect Joe Biden’s proposal to raise the minimum wage to $15 an hour could kill up to 3.7 million jobs, the Congressional Budget Office estimated.
The CBO said that some of the higher earnings from the $15 federal minimum wage could be offset by higher rates of joblessness.
The report found that 1.3 million workers who would typically be employed would be without jobs in an average week in 2025. A new federal minimum wage would also increase the pay of 17 million workers in an average week in 2025.
The increase in earnings would mostly affect low-income families, while a loss of business would affect higher-income families.
Families below the poverty line would receive an additional $8 billion in real income in 2025, while families above the poverty line would lose $16 billion in real income.
Biden detailed his coronavirus relief package last week, which included raising the minimum wage from $7.25 to $15.
“No one working 40 hours a week should still be below the poverty line,” he said. “People tell me that’s going to be hard to pass. Florida just passed it, as divided as that state is, they just passed it. The rest of the country is ready to move as well.”
The proposal, however, has garnered pushback from some Republicans.
“Forcing a $15 minimum wage into a coronavirus relief bill would do nothing but shutter the millions of small businesses already on life support and would force those that survive to lay-off employees,” said Sen. Tim Scott.
“If the federal government mandates a universal $15 minimum wage, many low-income Americans will lose their current jobs and find fewer job opportunities in the future,” Sen. Pat Toomey said.