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Tuesday, February 18, 2014

Congressional Budget Office Outlines Effects of Minimum Wage Increase

The Congressional Budget Office analyzed the impact of raising the minimum wage to $9.00 by 2016 and $10.10 by 2016. The non-partisan report found a dual impact of raising the minimum wage on workers. Those that retained employment would see a higher wage. Overall real income would rise by $2 billion under the $10.10 plan and $1 billion under the $9.00 plan.

The $10.10 option reduces employment by roughly 500,000 workers, or 0.3%. The $9.00 plan sheds 100,000 workers. Those who receive a higher wage will benefit and some families moving above the poverty threshold. However, the individuals that lose their job or are unable to attain one will suffer, and the poverty between the employment and unemployed will deepen.

Due to preset budget spending levels the next two years, the impact on the federal budget is negligible.

Read the full report.

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