CBO Says $15 Minimum Wage Would Be Mostly Positive

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.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate