Raising the federal minimum wage to $ 15 per hour in 2025 from the current level of $ 7.25 per hour, as President Biden has called for, would reduce employment by 1.4 million and reduce the number of Americans below of the poverty line at 900,000, according to a study released Monday by the nonpartisan Congressional Budget Office.
Biden and Democrats are pursuing legislation that exceeds twice the current federal minimum wage, saying it would raise many low-wage workers out of poverty, but Republicans and some businesses and economists have warned that this increase could cost jobs like the U.S. is recovering from pandemic redundancies.
The CBO study said that if the $ 15 minimum wage proposed by Democrats in Congress were approved, 17 million U.S. workers, or about 10 percent of the workforce, would increase their you are because otherwise they would earn less than the federal minimum wage. Another 10 million workers earning just over $ 15 an hour could also earn wage increases, according to the study.
The study assumes a June 1 enactment date for the bill, which raises the federal minimum wage to $ 9.50 per hour. According to the plan, the salary would increase annually to $ 15 per hour in 2025. Then the salary would be adjusted based on the change to the average salary of all workers.
The accumulated federal budget deficit from 2021 to 2031 would increase by $ 54 billion if a federal minimum of $ 15 were applied because higher prices for goods and services would contribute to an increase in federal spending, according to the report. Government spending on nutritional supplements would fall, but that would be offset by increased spending on Social Security benefits, unemployment benefits and health care programs, the OBC said.
The report found that enrollment in Medicaid, health care for low-income Americans, would fall because many workers would earn more, but program costs would increase due to higher prices for medical services.
Economic output would decline slightly, mainly due to declining employment, the OBC said.
An earlier 2019 CBO report found that a $ 15 per hour increase in the federal minimum wage in 2025 could cost 1.3 million Americans their jobs, lift 1.3 million Americans out of poverty, and increase the salary of about 27 million workers.
Write to Eric Morath to [email protected]
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