The Congressional Budget Office has published a new report on the $15 minimum wage.¹ Unusually for the CBO, it was a little hard to dig out all the relevant numbers, which means I had to read the whole thing fairly carefully. That’s very annoying, isn’t it?
Anyway, here are the main takeaways:
- Families below the poverty line would see a 5.3 percent increase in earnings. Families above the poverty line would see a 0.1 percent reduction in total income.
- Wages would rise for more than 20 million workers. However, among adults, 700,000 would lose their jobs. Many of these would be part-time workers, but CBO doesn’t put a number on it.
- Total wages for workers would rise by $44 billion (accounting for both higher wages and increased joblessness). Income for business owners would fall $14 billion.
- Consumers would pay higher prices amounting to a total of $39 billion. That’s an increase of about 0.3 percent.
Very few policy proposals are literally 100 percent positive, and the $15 minimum wage is no exception: a small number of low-income workers would lose their jobs and the affluent would pay slightly more for the stuff they buy. However, this is about as positive as you can expect in the real world. It’s a pretty small tradeoff for a 5 percent income boost for 20 million people.
¹The report also analyzes proposals for a $10 and $12 minimum wage, which I’m ignoring here.
