Rep. Bobby Scott‘s $15 minimum wage bill would cost private businesses $48 billion a year; the Congressional Budget Office said this week.
The CBO’s analysis of the Raise the Wage Act, H.R. 582 (116), which would phase in a $15 minimum wage over five years and index it to inflation after that, also says that state and local governments would have to pay an additional $3 billion to workers each year.
The analysis does not address the question of job losses, saying only that higher wages “could include reducing hiring, among other responses.” A 2014 CBO report concluded that raising the minimum wage to $10.10 would eliminate 500,000 jobs but increase real income by $12 billion for families near the poverty line.
Scott, in a statement to POLITICO, said the overall effect of his bill on business would be negligible.
“According to the CBO, gradually raising the minimum wage to $15 over six years — and providing a raise to nearly 40 million workers — will increase employers’ costs by just one-half of one percent (0.5 percent) of total private-sector wages by 2025,” Scott said. “Predictably, opponents of the minimum wage are attempting to twist this report to vilify a policy that a majority of Americans support. But the evidence is clear: Gradually raising the minimum wage is good for workers, good for businesses, and good for the economy.“
Scott’s bill has been a subject of intense internal debate among Democrats. More than a dozen moderate members favor a competing proposal by Rep. Terri Sewell (D-Ala.) that would allow for lower wages in rural areas, an idea that prompted a backlash from the party’s more liberal wing.