Raising the federal minimum wage to $15 per hour would boost the income of 17 million workers but could also lead to the loss of 1.3 million jobs, according to the Congressional Budget Office.
House Democrats have introduced a bill that would gradually raise the federal minimum wage to $15 per hour by 2024. They argue that doing so would lift workers out of poverty and kick-start economic growth.
In a report published on Monday, the CBO partially agreed with that assessment.
“For most low-wage workers, earnings and family income would increase, which would lift some families out of poverty,” the report said. “But other low-wage workers would become jobless, and their family income would fall — in some cases, below the poverty threshold.”
According to the CBO, a $15 minimum wage would amount to an average increase of 5.3% in income for families below the poverty threshold, lifting, on net, roughly 1.3 million people out of poverty.
“What the report makes clear is that the benefits vastly outweigh any cost,” Rep. Bobby Scott (D-Va .), the lead author of the Raise the Wage Act, told reporters.
But Vox suggested that “While all the new research helps Democrats in Congress make their case for doubling the federal minimum wage, the CBO report will give opponents more reason to push for a smaller wage hike.”
Economists at the University of California, Berkeley, reported last week that a $15 minimum wage would go a long way to combat income inequality — while its impact on job loss would likely be small to none.
The federal minimum wage, now at $7.25 per hour, was last raised in 2009, in the middle of the Great Recession. Since then, America’s lowest-paid workers have lost about $3,000 a year, adjusted for inflation, according to the Economic Policy Institute.
House Minority Leader Kevin McCarthy (R-Calif.) said the CBO report “reaffirms that a $15 minimum wage would kill American jobs and harm Americans struggling to make ends meet.”
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