Yellen backed 2014 report forecasting 500,000 lost jobs from minimum wage hike
Treasury secretary nominee Janet Yellen previously backed a 2014 report that found a $10.10 federal minimum wage could kill half a million jobs. On Tuesday, she claimed that a $15 minimum wage would result in “minimal” job loss.
Yellen testified before the Senate Finance Committee Tuesday morning, nearly two months after President-elect Joe Biden announced her nomination to head the Treasury Department. When Sen. Tim Scott (R., S.C.) criticized Biden’s plan to raise the minimum wage to $15, noting that it could “hurt our economy as much as it would improve our economy,” Yellen defended the proposal.
“I think that the likely impact on jobs is minimal,” Yellen said. “That’s my reading of the research.”
But Yellen endorsed a 2014 report from the nonpartisan Congressional Budget Office predicting up to 500,000 lost jobs as a result of a $10.10 minimum wage. While the Obama administration lambasted the report, Yellen defended the CBO, calling the agency “good at this kind of evaluation” and adding that she “wouldn’t argue with their assessment.” The CBO later found that a $15 minimum wage could kill as many as 3.7 million jobs, with total real family income dropping by $9 billion.
Biden has made a $15 minimum wage a key pillar of his economic package, but the policy is likely to face hurdles in an evenly split Senate. At least 10 Senate Republicans must back Biden’s proposal to avoid a filibuster, and many GOP lawmakers have already expressed their opposition. Sen. Pat Toomey (R., Pa.), for example, said that the proposal would cause “many low-income Americans” to “lose their current jobs and find fewer job opportunities in the future.”
Employment Policies Institute managing director Michael Saltsman echoed Toomey’s claim, telling the Washington Free Beacon that a $15 minimum wage would harm small businesses struggling to stay afloat during the coronavirus pandemic.
“It’s frankly irresponsible for the Biden administration to propose this at any time, but especially at a time when restaurants are dealing with huge 2020 losses, continued mandatory closures, and millions of jobs that haven’t come back since the start of the pandemic,” Saltsman said.
The Biden transition team did not return a request for comment.