The Congressional Budget Office has released an analysis- on jobs and family incomes – from altering the federal minimum wage to various higher levels by 2025.
The Congressional Budget Office, the fiscal professionals serving the US Congress, prepare the oft-watched “scores” for fiscal proposals, as well as various policy reports throughout the year. This week, they released a report on the economic impacts of changing the federal minimum wage.
The full report, “The Effects on Employment and Family Income of Increasing the Federal Minimum Wage,” is available on the CBO website.
Their central analysis of a $15 minimum wage – which would match that recently adopted by Maryland to be phased-in over a similar period of time, shows expected impacts on working families, and some contraction of jobs:
In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO’s median estimate. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million.
The job-related effects of a nationwide policy change are different, in their effect, than those posed by a state-by-state patchwork, which has evolved as multiple states have adopted their own minimum wage levels in excess of the national law.
Maryland’s recently-enacted law is described in this recent Conduit Street post: Maryland’s Minimum Wage Law, Explained