CBO: Minimum Wage Hike Would Cut Jobs, Increase Overall U.S. Income

Raising the federal minimum wage to $10.10 per hour, as promoted by President Barack Obama, could cost the country about 500,000 jobs, but would lift 900,000 people out of poverty, the Congressional Budget Office estimated in a report released today. The report says about 16.5 million workers who currently work for an hourly wage less than $10.10 would see their average weekly earnings increase under the wage hike, and “a few higher-wage workers would owe their jobs and increased earnings to the heightened demand for goods and services that would result from the minimum-wage increase.” Taking into account the impact on people who would become jobless as a result of the increase, and reductions in incomes for business owners and consumers facing higher prices, CBO estimated overall real income would rise by $2 billion. The current minimum wage – $7.25 per hour – has been in place since 2009, and was established by a law passed in July 2007.