CBO: Minimum Wage Hike Could Eliminate Millions of Jobs

CBO: Minimum Wage Hike Could Eliminate Millions of Jobs

CBO: Minimum Wage Hike Could Eliminate Millions of Jobs

Opponents of hiking the pay floor to that level - more than twice the current USA minimum wage of $7.25 that took effect in 2009 - argue it would cut positions for minimum wage workers amid higher costs.

"More and more, economists recognize that simple, dated models of the economic system that always forecast job loss when the minimum wage is raised are based on assumptions which have little bearing on the low-wage labor market", EPI mentioned in a statement. As the CBO observes, 29 states and the District of Columbia now have a minimum wage higher than the federal minimum.

The report, coming ahead of an expected House vote on the Raise the Wage Act, found that a $15 minimum wage would also reduce output and business income - a cost that would be passed on to consumers in the form of higher prices - for a cumulative $9 billion hit to median family income.

"The Congressional Budget Office examined how increasing the federal minimum wage to $10, $12, or $15 per hour by 2025 would affect employment and family income", the CBO report said. (In those states, the higher rate applies.) The CBO points out that the minimum wage is inflation-indexed in 17 of those states.

The increased federal minimum could also raise the wages of another 10 million workers and lift 1.3 million Americans out of poverty, according to the nonpartisan CBO. Overall resulting job losses would range between "about zero" and 3.7 million, the economists found. However, says CBO, it will also trigger a median 1.3 million workers to lose their jobs as employers can not afford the wage - that's a 0.8% reduction of the variety of employed workers.

"I've worked for minimum wage and I was once a young single dad raising my son and having to balance work, family life and a checkbook".

Anthony Advincula, spokesman for the Restaurant Opportunities Center, a non-profit worker center, said the CBO report shows that the benefits of the proposed bill outweigh its potential costs, which he says are "substantially overstated". "So you can't go across town kind of play one against the other", Scott said during a press call Monday. Virginia Congressman Bobby Scott of Newport News says that makes it hard for many low-wage workers to earn much more than the minimum wage.

Critics say that boosting the minimum wage could cause staff to lose their jobs. "That is unacceptable-one job lost is one too many". "The consequences will be especially brutal for small businesses, which already operate within razor-thin budget margins". "The rising minimum wage will increase pay for those minimum-wage workers who remain employed, as well as for those who would likely see a raise to keep the pay scales in the right order".

Supporters of the Raise the Wage Act, which would increase the minimum wage in six steps to $15 per hour by 2024, argue that the federal floor has not budged in a decade. That's the biggest time lapse since 2007 when the wage hadn't risen since 1997.

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