CBO Report Looks at Effect of Raising the Federal Minimum Wage
The federal minimum wage (FMW), currently $7.25 per hour, hasn't increased since 2009—the longest stretch with no federal increases since 1938, when the minimum wage was created. Several presidential candidates as well as proposed House Bill H.R. 582, Raise the Wage Act, would raise the FMW. What effect would a wage increase have on wage earners, families, employers, and the economy?
The Congressional Budget Office (CBO) released a new report that examined the impact of raising the federal minimum wage to $10, $12, or $15 per hour by 2025 and how this would affect employment and family income.
According to the CBO, for the roughly 40 million wage-earners, the $15 option would be the most impactful, boosting the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to the CBO's median estimate. Also, there is a two-thirds chance that between zero and 3.7 million workers could be affected by a change in employment. However, the number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million.