Beyond Labels

A 360° Discussion of Foreign, National and Local Policy Issues

Pres. Biden and the Minimum Wage

At yesterday’s discussion, I mentioned that I had made my first request to The Fact Checker at the Washington Post. And it was, in fact, checked.

Here’s the text of my original form:

Impact of Minimum Wage Hike

Made by Joe Biden
StatementAll the economics show that if you do that [increase the minimum wage to $15], the whole economy rises.”
Source for StatementVideo clip (this comment at 01:17)
CommentJoe isn’t specific about what “the economics” are, but “All” is pretty specific.   Here’s a link to a July 2019 CBO report on minimum wage effects: As I read Table 1 (pdf page 7) of that report, a $15 minimum wage would increase the “real income” (see definition below the table) of families up to three times the poverty threshold, but would decrease the annual real income of “All families” by $8.8 billion (2018 dollars).   I don’t consider an action that costs Americans $8.8 billion per annum to support his statement that “the whole economy rises.”   And “all” is a very strong statement, that would lead viewers/listeners to believe that there is really no doubt as to the overall economic effect of a $15 minimum wage.

And here’s a PDF of the WaPo article. I would have given it three Pinocchios, but reasonably people may differ.

I also sent (in the same email) a request for fact-checking the hourly wage corresponding to the “poverty wage level.” Here it is:

Poverty Wage Level

Made by Joe Biden
Statement“Look, no one should work 40 hours a week and live below the poverty wage. And if you’re making less than $15 an hour, you’re living below the poverty wage.“
Source for StatementVideo clip (this comment at 01:32)
CommentJoe’s math is wrong. See the table below.
Sen. Joe Manchin, in a recent interview, took the position that someone working 40 hours/week, 50 weeks/year should be able to support a household of three at the poverty level, and that he thought $15.00/hour was too much. By the math below, to meet his standard, a $10.86 minimum wage would meet the test.
Poverty guidelines source:; actual worksheet (above) attached.

Although I recognized that my second request (whether $15/hour is the cusp of the “poverty wage”) is closely related and may be getting stale, the [I believe incorrect] statement was reiterated yesterday by Jen Psaki, so I’ll bring that to Mr. Kessler’s attention as well. Repetition breeds belief…(or something like that).


  • I would imagine that the real profits from the investment world would go down. Has that concept been linked?

    • With higher labor costs, it’ll probably be a combination of higher prices of goods and services and lower profits (and lower profits at “real companies” should reduce the value of those firms, hence lower values in the “investment world”). How much of any increase in “input” costs (like labor and capital) get passed on to buyers and how much gets absorbed in lower profits depends on the competitive landscape. Both in the internal US market and, thanks to free(-ish) trade, the global one.
      We can revisit the subject some week (if folks want to) in more detail. These comments aren’t a great forum for having a nuanced discussion with lots of offsetting (and uncertain) factors.

  • Also all families would include those earning above the poverty wage indicating a redistribution of the wealth, Yes?

  • Yes. Look at the CBO table and you can see who benefits and who doesn’t from a minimum wage hike.

    There are clearly “winners” and “losers.” That’s a given with almost any such mandate. My point in requesting the fact check was that Pres. Biden implied that it was undisputedly clear that, collectively, the nation “wins” from a $15 minimum wage. And the non-partisan CBO report on the subject indicates, as I read it, that, net-net, Americans “lose” (in lower income after expenses) by $8.8 billion/year.

  • Perhaps Covid-19 ‘s lesson plan is to re-value the importance of Essential Services labor. Mail Delivery. Elementary & pre-school Teachers. Nurses. Age/medical recoveries in the home. All should be paid more and many other ESPs. So “economics” the dismal science, can’t be divorced from social utility, which must change over time.
    This isn’t to defend the minimum wage, just the importance of looking at the BIG picture.
    Sorry, this may be off the point; I had to leave before this part of yesterday’s discussion.

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