If 2020 was bad for small businesses, President Joe Biden apparently wants to make sure 2021 is deadly.
He probably won’t be able to do the job right off the bat. In an interview with “CBS Evening News” anchor Norah O’Donnell that aired Sunday, Biden said his push to increase the federal minimum wage to $15 an hour likely won’t happen with the COVID relief package.
“I put it in, but I don’t think it’s going to survive,” Biden said, according to CNN.
But he’s not going to stop trying. Biden said he’s prepared to engage “on a separate negotiation on minimum wage, to work my way up.”
That $1.9 trillion COVID package is being pushed through using a method called “budget reconciliation,” where a bill only requires 51 votes to pass the Senate and isn’t subject to the filibuster. However, the bill must have a substantial impact on federal spending, revenue or debt.
Whether or not hiking the minimum wage to $15 an hour by 2025 would qualify for “budget reconciliation” is a matter of some debate. (Vermont independent socialist Sen. Bernie Sanders, who proposed the bill, has said that it does, according to Politico.) Even if it doesn’t, however, White House press secretary Jen Psaki has said the president is “firmly committed” to the minimum wage hike.
MINIMUM WAGE: Jen Psaki says, “The President remains firmly committed to raising the minimum wage to $15,” as relief package may not include a wage hike provision.
— Forbes (@Forbes) February 8, 2021
“The president remains firmly committed to raising the minimum wage to $15; that’s why he put it in his first legislative proposal,” Psaki said at her Monday news conference.
“And he believes that any American who is working a full-time job, trying to make ends meet, should not be at the poverty level. And it’s important to him that the minimum wage is raised.”
Trying to raise the living standards of those at the lowest rung of the employment ladder by hiking the minimum wage may seem like a noble goal on its face. In truth, it’s just chopping off a few rungs on that ladder, making it harder to get in on the ground floor.
According to a report by the nonpartisan Congressional Budget Office released Monday, while raising the minimum wage would theoretically lift 900,000 out of definitional poverty, it would also cost 1.4 million jobs.
The CBO also found the bill would cause prices to rise, economic output to fall and the budget deficit to widen, The Wall Street Journal reported.
“Employers would consequently produce fewer goods and services, and as a result, they would tend to reduce their employment of workers at all wage levels,” the CBO report stated.
“Young, less educated people would account for a disproportionate share of those reductions in employment.”
When asked about the report, Psaki said she hadn’t read it yet.
“Well, I heard about the CBO score as I was walking out here, so I haven’t talked with our economic team about that specifically,” Psaki said.
“And at this point in time, it’s still working its way through the process in Congress. And the parliamentarian still has to make a determination about what will be in a final package.”
This result shouldn’t have been unexpected, however. The GOP has been sounding alarm bells about the eventual effects of a $15 minimum wage on a federal level, particularly when it came to job loss and restraining economic growth in red states, which tend to have a lower cost of living and doing business (and therefore lower wages):
I asked @JanetYellen how raising the minimum wage to $15 affects the millions of #smallbiz on the brink of closing. Her answer was disappointing & didn’t mention the 3.7 million jobs the @USCBO estimates will be lost. I’ll fight to protect businesses from these damaging policies. pic.twitter.com/ybcSsdONqq
— Tim Scott (@SenatorTimScott) January 19, 2021
On top of fewer hours, 3.7 million less jobs, higher labor costs & encouraging technology to replace workers – higher minimum wage mandates HELPS BLUE STATES that can’t compete anymore for growth, jobs.
Read more. https://t.co/XZu7YjTYEX
— Rep. Kevin Brady (@RepKevinBrady) January 25, 2021
Furthermore, the minimum wage hike would begin as the number of small businesses that are open is down 33.6 percent since January of 2020, according to data from TrackTheRecovery.org. A minimum wage hike wouldn’t necessarily hurt mega-corporations like Amazon, Target or Walmart in an existential way, but it would be practically fatal for some mom-and-pop businesses.
The job losses would also come as low-wage workers have been particularly hard-hit by the pandemic. Going back to the TrackTheRecovery.org data, while high-wage employment (more than $60,000 a year) actually rose between January and December of 2020, low-wage employment (under $27,000) went down by 21 percent.
And while the $15 minimum wage would be phased in over four years, the first incremental phase would likely begin when the bill is signed — meaning an immediate hit for small businesses and the low-income Americans who would lose their jobs because of it.
But that’s the Biden administration: Jobs come second to ideology, as witnessed by Biden’s cancellation of the Keystone XL pipeline on his first day of office, at the cost of thousands of jobs.
Democrats love low-income workers so much that they’re “firmly committed” to legislation that would allegedly take them out of poverty by eliminating 1.4 million of their jobs and closing their employers down.
If Biden can’t do it through budget reconciliation, fear not, minimum-wage earners of America: He’s got your back, even if you’d prefer he didn’t.
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