This week’s release of the Congressional Budget Office (CBO)
report on the minimum wage has generated a good amount of discussion about the potential impacts of a minimum-wage hike. Not immediately apparent from these discussions – as this CEPR post points out – is the fact that, on the whole, the report shows that on almost every issue, the report sides with supporters of an increase.
– Raising the minimum wage would benefit many American families. The CBO estimates that about 16.5 million workers would receive a wage increase, and that about 8 million additional workers would be indirectly impacted as employers adjust internal pay scales. These numbers are consistent with EPI’s estimate in this report, which also breaks down the impact by state (about 735,000 NC workers would be directly affected and over 1 million would see a raise).
– Most minimum wage workers are older than you think. The CBO concludes that only 12 percent of low-wage workers who would receive a wage increase are teenagers. Proponents of minimum wage hikes have long worked to dispel the myth that the majority of minimum-wage workers are suburban teenagers working for spending money. In fact, close to a third of America’s minimum wage workers are over 40 and in North Carolina, 82 percent are 20 or older.
– The minimum wage can act as a stimulus to the broader economy. The CBO report acknowledges that low-income earners tend to spend a larger proportion of their earnings than the average consumer, thus providing a stimulus effect. Our report citing EPI data shows that the estimated GDP impact on North Carolina of a minimum wage increase to $10.10 would be approximately $1.3 billion.
Here’s the controversial piece: the CBO estimates that increasing the minimum wage to $10.10 could cost 500,000 jobs or 0.3 percent of total employment. When evaluating this statement, it’s important to keep in mind methodology, Read more