President Obama’s proposal to raise the minimum wage to $10.10 an hour would increase earnings for 16.5 million low-wage Americans but cost the nation about 500,000 jobs, congressional budget analysts said Tuesday. About 15 percent of the nation’s workforce would see wages rise under the proposal, according to the report from the nonpartisan Congressional Budget Office. In addition to the 16.5 million people who earn less than $10.10 an hour, as many as 8 million workers whose earnings hover above that level could also benefit, the report said.
The higher wages would lift about 900,000 people out of poverty, the report said.
But the CBO warned that raising the minimum wage could also cause employers to lay off low-wage workers or hire fewer of them, reducing overall employment by about 500,000 jobs, or about 0.3 percent of the labor force. The CBO acknowledged that its calculation is an estimate and said actual job losses could range from “very slight” to as many as 1 million positions.