Amazon recently endorsed the Raise the Wage Act, a bill co-authored by Sens. Bernie Sanders, I-Vt., Patty Murray, D-Wa., and Congressman Bobby Scott, D-Va., which would incrementally increase the federal minimum wage from $7.25 per hour to $15 per hour by 2025.
"President Biden has made clear his support for an increase in the minimum wage, which has been stuck at $7.25 since 2009," Amazon global corporate affairs senior vice president Jay Carney wrote in a blog post on Jan. 26. "Passing the Raise the Wage Act would increase incomes for millions of employees and revitalize the national economy."
The company raised its own minimum wage to $15 per hour in November 2019 and has been lobbying Congress ever since to get a federal minimum wage increase passed.
"During the last congressional session, Amazon advocated for the previous version of the Raise the Wage Act, which passed in the House but stalled in the Senate. We will continue our advocacy this Congress," Carney said. "Our hope is that—with new support from the White House and committed leadership from the bill’s authors and cosponsors—this legislation will quickly advance to the president’s desk and be signed into law. As we take steps to recover from the devastating economic impact of the COVID-19 pandemic, America’s workers in need of a raise, small businesses that will benefit from increased spending and the country’s broader economic recovery simply can’t wait."
According to Carney, Amazon believes a $15 wage hike is "good for business," citing positive impacts on employee morale and retention as well as a surge in job applicants.
"The month after we raised our starting wage, applications for hourly positions more than doubled. Employees who saw their paychecks increase told us that they had an easier time providing for their families and were able to spend on things like car repairs and home improvement projects," Carney said. "In short, the investments we made in our hourly employees were quickly transferred to local businesses and economies."
However, a study by the nonpartisan Congressional Budget Office released on Monday estimates that Democrats' efforts to raise the federal minimum wage to $15 an hour would reduce up to 1.4 million jobs by 2025. In addition, the CBO projects that while the measure would lift roughly 900,000 Americans out of poverty, roughly $54 billion would be added to the nation's deficit over the next decade as a result of higher prices for goods and services, such as long-term health care.
While government spending on nutrition programs would decline, the CBO says that hiking the minimum wage would increase spending in other areas, including unemployment aid, Social Security benefits and other health care programs like Medicaid.
"Employers would pass some of those increased costs on to consumers in the form of higher prices, and those higher prices, in turn, would lead consumers to purchase fewer goods and services," the study said. "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 proposed change would affect 17 million workers who earn the minimum wage in an average week in 2025, the year the new minimum wage would kick-in, as well as another 10 million workers who already earn close to $15 an hour, the agency said.
An Amazon spokesperson declined to comment on the CBO's report.
Amazon isn't the only company that has expressed support for a $15 minimum wage.
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Other companies that have recently increased wages to at least $15 an hour include Target, Best Buy and Costco. Amazon added that it is "hopeful that more will follow suit."
Sen. Sanders slammed the CBO's report, arguing in a statement that he finds it "hard to understand how the CBO concluded that raising the minimum wage would increase the deficit by $54 billion" after concluding two years ago that a $15 minimum wage would "increase the deficit by less than $1 million over ten years."
He said the report is evidence that Democrats could use their slim Senate majority to pass the minimum wage increase through a process called "budget reconciliation" without violating the "Byrd rule." The rule prevents "extraneous" provisions from being included in reconciliation so that only items affecting the federal budget can be included.
"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," Sanders said. "What that means is that we can clearly raise the minimum wage to $15 an hour under the rules of reconciliation."
The federal minimum wage has not increased in more than a decade, although a growing number of states have voted to adopt their own wage increases. There are 29 states with wages above the federal minimum wage, according to the National Conference of State Legislatures. At $14 an hour, California currently has the highest minimum wage in the nation.
Fox Business' Megan Henney contributed to this report