Raising the minimum wage to $15 an hour would significantly reduce poverty and increase earnings for millions of low-wage workers, while adding to the federal deficit and cutting overall employment, according to a new study from the nonpartisan Congressional Budget Office.
The report is sure to animate the already heated debate whether to include raising the federal minimum wage in a budget resolution to help the sputtering economic recovery and aid vaccine distribution amid the pressures of the pandemic, according to The Washington Post.
On one hand, the CBO estimated that raising the minimum wage to $15 an hour would cost 1.4 million jobs by 2025 and increase the deficit by $54 billion over 10 years.
But it also estimated the policy change would lift 900,000 people out of poverty and raise income for 17 million people—about one in 10 workers. Another 10 million who have wages just above that amount could potentially see increases as well, the CBO noted.
The net pay going to the country’s workers would grow substantially, by $333 billion, as the increase in pay for workers would more than double the amount subtracted by the workers who lose their job, according to the estimate.
The existing federal minimum wage, at $7.25 an hour, has not been changed since 2009 and remains below historic levels when adjusted for inflation, despite gains in worker productivity. Read the full story.