Raising the federal minimum wage to $ 15 an hour by 2025, from the current level of $ 7.25 an hour, as advocated by President Biden, would cut jobs by 1.4 million and reduce the number of Americans below the line. 900,000, according to a study released by the non-partisan Congressional Budget Office on Monday.
Biden and the Democrats are seeking legislation to more than double the current federal minimum wage, saying it would lift many low-income workers out of poverty, but Republicans and some companies and economists have warned that such an increase could cost jobs as the US recovers. of coronavirus pandemic layoffs.
The CBO study said that if the $ 15 minimum wage bill proposed by Democrats in Congress was passed, 17 million American workers, or about 10% of the workforce, would have their wages increased because they would otherwise earn less than the federal minimum wage. Another 10 million workers who earn just over $ 15 an hour can also receive salary increases, the study said.
The study considers the bill’s promulgation date to be June 1, raising the federal minimum wage to $ 9.50 an hour. Under the plan, wages would be increased annually to $ 15 an hour in 2025. Thereafter, the wage floor would be adjusted based on the change in the average wage for all workers.
The cumulative federal budget deficit from 2021 to 2031 would increase by $ 54 billion if a federal minimum of $ 15 was enacted, because higher prices for goods and services would contribute to an increase in federal spending, the report concluded. Government spending on nutritional supplements would fall, but that would be offset by higher spending on Social Security benefits, unemployment insurance and health programs, the CBO said.