Unforced error: How Bernie Sanders may have killed the $15 minimum wage, and why leftists are scrambling to trash the CBO (and math)

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The Trump White House once called the Congressional Budget Office's negative scoring of their preferred legislation "little more than fake news." Now, Bernie Sanders and his top yes-men, including Rep. Ro Khanna, are doing the basically the same thing.

It shouldn't come as too much of a surprise. Populists have a habit of dismissing independent, thoughtful, nonpartisan analysis in favor of their in-house (and biased) experts, and economic populists are no different.

Trump flipped out because the CBO has dared to project that his massive tax breaks for big corporations and the wealthy would balloon the deficit and the national debt. Sanders and Khanna too are lashing because the CBO dared to touch their sacred cow, a $15 federal minimum wage. In an analysis the CBO released on Monday of the Democratic proposal to raise the minimum wage in steps to $15 by 2025 would increase the federal deficit by $70 billion (including interest on debt) and there would be 1.4 million fewer jobs.

The analysis notes plenty of benefits of raising the minimum wages too, not the least of which is increasing wages for 27 million people, but major attention has been focused on the job-loss figures partly because of the tenuous position of the minimum wage increase in Congress.

While there appears to be near-unanimous support for raising the federal minimum wage to $15 an hour among Democrats - and certainly from the White House - there is zero appetite for it among Congressional Republicans. Bernie Sanders himself estimates that there will never be 10 Republican votes that would be needed in the Senate to overcome a Republican filibuster to pass a $15 minimum wage through 'regular order.'

Therefore, the only possible way to pass it through the current Senate is to use budget reconciliation, which allows legislation to pass with a simple majority vote. However, as I pointed out before, the minimum wage hike will have an uphill climb qualifying under reconciliation rules.

But just as critically, this CBO report may just end its prospects - at least the prospects of raising the minimum wage to $15 an hour - even if it were determined that it requires only a simple majority vote. Some Democrats in the Senate - most prominently Sen. Joe Manchin of West Virginia - have already expressed misgivings, or in Manchin's case, outright opposition to a $15 minimum wage. This CBO report will not only buttress the GOP's case against it, but that of Democratic senators, losing even one of whom will deal a fatal blow to the wage hike, regardless of what procedure is being used.

While people like Khanna and Sanders are slamming the CBO now that it has come up with a conclusion they don't like, there is good reason lend credence to CBO's analysis, even if it weren't the nonpartisan, independent authority on fiscal matters for Congress. While everyone in the progressive movement supports increasing the minimum wage, everyone instinctively knows that there's a limit to that for a given time. It's the reason Democrats are pushing for a $15 minimum wage and not a minimum wage of $55 an hour. So implicitly, everyone recognizes that it's possible to raise the wage too much too fast.

We don't have to depend on common sense to know that, either. When Seattle raised their minimum wage a little too quickly in the twenty-teens, some of what is laid out in the CBO reported played out in the city. By 2016, Seattle had raised its minimum wage to $13 an hour, and as a result, number of low-wage hours worked - and therefore the paychecks of low-wage workers... fell. Both anecdotal experience and empirical data confirm this.

Cost of living varies widely throughout the country, and it is absolutely possible that the effect of increasing the minimum wage to the same level at the same time will have disparate impacts. In fact, disparate impact is inevitable. In states like California, where the state minimum wage will be $15 by 2023, the federal hike will have little to no impact. But in states like West Virginia, where the minimum wage is just $8.75, the jumps will be substantial and more likely to bring with the positives some temporary negatives as well. Manchin has said that he'd prefer a minimum wage around $11, and given his state, he has a point and now, with the new CBO report, a reason to put his foot down.

Still, the most damning line in the CBO report wasn't about how a $15 minimum wage would cost some jobs and marginally increase inflation and interest rates. It was the following:

This Congressional Budget Office report was prepared in response to a request by the Chairman of the Senate Committee on the Budget.

The Chairman of the Senate Committee on the Budget, of course, is Bernie Sanders. Bernie Sanders is the one who handed Republicans the biggest gift they have had thus far in the fiscal stimulus legislation.

Bernie Sanders requested the CBO report that has suddenly shaken the case for the dearest of his pet issues. If the report ultimately proves to be the demise for a $15 minimum wage, Bernie Sanders, and only Bernie Sanders, will be responsible for killing that possibility. Sanders made the calculation that without a CBO score of the specific legislation it will be difficult to make the case for reconciliation to the Senate parliamentarian, and he now claims mission accomplished on that account, but he may just have ended up killing its chances even if it now qualifies for a majority vote.

At the very minimum, Sanders, without prompting, has handed opponents of a minimum wage hike a potent and serious political weapon. At the maximum, he may have ended any hopes that a $15 minimum wage will pass this Congress. This is unforced error.

Don't get me wrong. I'm on board with a $15 minimum wage. But we have got to stop pretending it will have no ill effects whatsoever and argue instead that on balance, the good it will produce will far - far - outweigh the bad. The right response to the CBO's estimate should be the really good things the CBO also found about a $15 minimum wage:

  • By the time a $15 minimum takes full effect in 2025, it will have raised wages for a total of 27 million workers (!).
  • Raising the minimum wage would better balance the wealth and income scales in this country toward the bottom of the income ladder.
  • It will lift a million people out of poverty, and end the indignity of the subminimum wage for tipped workers and workers with disabilities.

Against these major improvements, 1.4 million fewer jobs is a price we should be willing to be pay, and we should be honest about that. Democrats should also point out that President Biden's higher education plan will make trade school and a college degree free of cost to middle class families, meaning that more people will be able to take advantage of retraining for fields that are booming but struggling for workers.

Progressives should be proud of advocating for dignity for working people. We should be unapologetic about saying that people who are disabled deserve equal treatment and equal pay, and workers should not have to rely on tips (and often the abuse of customers who tip) to simply make ends meet. But we should not be afraid to make progress in steps, and we should not - unlike the right - meet inconvenient math with derision and disqualification.

A $15 minimum wage is a public policy, not a religion. It needs not be defended as a pure good. It should be advocated for with honesty and with an acknowledgment of potential shortcomings. Doing anything else is the type of intellectual dishonesty that repels people from politics.



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