How did they do that? Dube notes that the latest report “UPweighted more negative studies,” despite, in at least one case, evidence having emerged since the negative study to call its results into question. Even a recent review of the available data by noted minimum wage increase opponents David Neumark and Peter Shirley “had a median estimate of -0.15 for directly affected workers, less than half the size of the CBO assumption,” the Economic Policy Institute’s Ben Zipperer pointed out.
Jesse Rothstein, a University of California at Berkeley economist and former chief economist at the U.S. Department of Labor, tweeted: “It isn’t clear to me why CBO seems to be putting its thumb on the scale. But its estimates seem far out of line with professional opinion.”
That’s the basic thing: The CBO is picking and choosing the data that makes a minimum wage increase look worse—and still finding that it would lead to a 10-year wage increase of $333 billion for low-wage workers and 900,000 fewer people in poverty.
Senate Budget Committee Chair Bernie Sanders highlighted another weird shift in the CBO’s predictions for a minimum wage increase, saying in a statement: “I find it hard to understand how the CBO concluded that raising the minimum wage would increase the deficit by $54 billion. Two years ago, CBO concluded that a $15 minimum wage would increase the deficit by less than $1 million over ten years. Further, several major studies done by the Center on Wage and Employment Dynamics and the Economic Policy Institute both found that raising the minimum wage would amount to a significant reduction in the deficit.”
But, Sanders continued, there’s good news for the prospect of passing the Raise the Wage Act through reconciliation in the Senate, because “from a Byrd Rule perspective, the CBO has demonstrated that increasing the minimum wage would have a direct and substantial impact on the federal budget. What that means is that we can clearly raise the minimum wage to $15 an hour under the rules of reconciliation.”
And it’s going to have to be reconciliation, because as Sanders also said, “We are never going to get 10 Republicans to increase the minimum wage through ‘regular order.’” Republicans support a starvation wage. That’s not going to change anytime soon.