A room full of brains and calculators... That's the Congressional Budget Office, a non-partisan government agency that takes proposed legislation and calculates the economic impact. Its newest report dives into the "Raise the Wage Act" — which would increase the minimum wage nationwide to $15/hour by 2025. It'll likely pass in the Democrat-controlled House of Reps, but it’s unlikely to become law right now.
Paying people more is a trend... Although the federal minimum wage ($7.25/hour) can't even buy a Chipotle burrito (pre-guac) after not being increased since 2009, 29 states plus DC have increased theirs during that period. Here's who'd win and lose with a nationwide livable wage.
- Winners: 17M people would get their pay upped to $15. And 10M more would likely get raises because a rising tide lifts bigger boats, too. Plus, 1.3M working-poor would escape poverty.
- Losers: The CBO predicts 1.3M Americans would lose their jobs, as managers don't think they're worth $15/hour, or decide to use machines instead of costlier humans.
- One caveat: These are just predictions based on economic theory and math. The CBO isn't Professor Dumbledore.
Companies would lose, at first, for sure... Higher wages = higher costs = smaller profits. McDonald's has been lobbying against an increased minimum wage for that reason (but actually ended its fight recently because wage hikes seemed inevitable). But longer term, the CBO tells us that 27M Americans will have more money... which they will spend... which could increase companies' profits. We'll know for sure when the theoretical becomes real.