What Republicans Get Wrong About Minimum Wage
Last month, the Congressional Budget Office released a 30+ page report on the effects of a proposed $15 minimum wage. Surprisingly, both Democrats and Republicans claimed the story as a victory, which may be the first bipartisan moment of 2019. For the GOP, the rebuttal to the minimum wage is that if we raise wages, it will be expensive for businesses and people will be laid off. Republicans cite the CBO report, which found that between 0-3.7 million people could lose jobs (with the most likely amount being around 1.3 million), as validation for their fears. While no argument is waterproof, the GOP's unemployment scaremongering is full of holes.
The Jobs Lost Aren't Primary Income
Rep. Virginia Foxx (R-NC) of the Labor and Education committee told reporters that the CBO's report is "unacceptable — one job lost is one too many." State and national-level republicans echoed this sentiment, with some democrats even jumping on the bandwagon. However, GOP and Blue-Dog attacks on the $15 minimum wage ignore critical findings within the Congressional Budget Office's report. Those like Foxx focus on one figure: 1.3 million people may their job should Raise the Wage Act become law. However, they omit two key facts. First, nearly half of all those who lose their jobs would be teenagers. The majority of these jobs are summer or part-time and thus do not provide significant income in the first place. In the (albeit unlikely) case that the money earned in these positions is vital, exemptions to a raised minimum wage for teenagers exist and could be implemented on a national scale. Exemptions may encourage employers to retain teenage workers, allowing young people to continue earning wages. Second, teenagers included, the vast majority of the 1.3 million are part-time workers. Part-time jobs are frequently supplemental income sources, and many of them are addendums to a primary income source. For example, you could have a career as a waitress in addition to being an office clerk. Therefore, losing your job wouldn't be a death sentence. Raising the minimum wage is predicted to grow overall wages as well, balancing out the risks associated with losing a part-time job. Even more importantly, being in-and-out of work is not abnormal for those in part-time jobs: Nearly 20% of part-time workers lose their jobs each month. These critical gaps in the conservative's analysis indicate that these 1.3 million individuals would not lose vital income.
The CBO isn't foolproof
All this analysis assumes that the CBO's report itself is accurate; It may not be. Researchers from the University of California at Irvine concluded that there is no indication a national minimum wage of $15 will lead to long term rises in unemployment. A paper from Berkeley (which, by the way, wasn't included in the CBO aggregate because it came out in July), had the same findings. A widely read meta-analysis in the Journal of Quarterly Economics concluded that "We also find no evidence of disemployment when we consider higher levels of minimum wages." While the CBO is a credible, trustworthy institution, a myriad of studies appears to contradict it, indicating that the arguments about unemployment hold even less water than before.
Even if it’s doomsday, things are still good
Aside from the effects on employment, CBO weighed the costs of job loss and the benefits of better pay. The CBO's estimate that the $15 option would reduce the number of people in poverty by about 1.3 million is "a net effect of families moving both into and out of poverty." To save you a trip to the dictionary, "net" means the composite of movements in and out of poverty here, meaning that poverty reduction isn't a trade-off with unemployment. Even after projected employment losses total, American poverty goes down 10%, which is a massive benefit to American workers.
The data tells a clear story: Increasing the minimum wage is profoundly positive. It is far past time the GOP read the research.