The Morning Economic Report
8:56 pm
Mon March 3, 2014

National Minimum Wage - 3/4/13

A recent report supplied by the nonpartisan Congressional Budget Office indicates that a proposal to raise the national minimum wage to $10 and 10 cents per hour could reduce total US employment by 500,000 workers by the latter half of 2016.  

But the proposal would also lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week.  As reported by writer Annie Lowrey, the Congressional Budget Office estimates that families living in poverty would see their incomes rise by $5 billion per year while families earning from 1 to 3 times the poverty threshold would earn $12 billion more each year. 

The budget office actually analyzed two proposals in its report.  The first would increase the minimum wage to $10.10 by mid-2016 and tie it to the consumer price index, meaning that it would increase with inflation over time.  A second proposal would increase the minimum wage to 9 dollars and would not index for inflation.  That would have smaller effects, reducing employment by only 100,000 workers by the latter half of 2016.