Raising the federal minimum wage to $ 15 per hour by 2025 from the current level of $ 7.25 per hour, as President Biden called for, would reduce jobs by 1.4 million and the number of Americans below the poverty line by 900,000 reduced, according to a study released Monday by the nonpartisan Congress budget office.
Mr. Biden and Democrats are following legislation to double the current federal minimum wage, saying it will lift many low-wage workers out of poverty, but Republicans and some businesses and economists have warned that such an increase could cost jobs like the US. recovery from coronavirus pandemic layoffs.
The CBO study said that 17 million U.S. workers, or about 10% of the workforce, would increase their salaries if the minimum wage bill of $ 15 proposed by Democrats in Congress were increased, because otherwise they would be less than the federal minimum wage would earn. . A further 10 million workers earning just over $ 15 an hour could also potentially receive increased wages, the study said.
The study assumes that the bill will go into effect on June 1, raising the federal minimum wage to $ 9.50 per hour. Under the plan, wages will be increased annually to $ 15 per hour by 2025. Thereafter, the pay floor will be adjusted based on the change in the average wage of all workers.
The report found that the cumulative federal budget deficit would increase by $ 54 billion from 2021 to 2031 if a federal minimum of $ 15 were introduced. The government’s spending on nutritional supplements will decline, but this will be offset by increased spending on social security benefits, unemployment benefits and health programs, the CBO said.