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The President is calling for an
increase in the federal minimum wage from its current rate
of $7.25 to $10.10. The Congressional Budget Office
evaluated the President’s proposal and made the following
conclusions.
a.
Many low wage workers (16.5 million) would see an increase
in their earnings.
This equates to earns of $31 billion.
b.
The hightened demand for good and services due to a higher
minimum wage could benefit a few higher-wage workers.
c.
Total employment will be reduced by 500,000.
d.
In
addition to the reduction in jobs, the increased earnings
will result in reduced earnings for business owners and
higher prices for consumers.
e.
Once all increases and decreases are taken into account, the
overall real income would rise by $2 billion.
f.
900,000 out of 45 million people could be moved above the
poverty threshold.
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