Raising Minimum Wage Reduces Jobs, Poverty | NACS Online – Media – News Archive
Sign In Help

The Association for Convenience & Fuel Retailing

Skip Navigation LinksNACS Online / Media / News Archive

Raising Minimum Wage Reduces Jobs, Poverty

A Congressional Budget Office report suggests that raising the minimum wage would eliminate roughly 500,000 jobs by 2016 while lifting nearly a million people out of poverty.
February 20, 2014

​NEW YORK – A Congressional Budget Office (CBO) suggests that raising the federal minimum wage to $10.10 an hour would eliminate about 500,000 jobs by 2016 but lift nearly a million people out of poverty, the Wall Street Journal reports.

The data is likely to intensify the debate among economists and politicians about the value of raising the minimum wage from the current $7.25 an hour.

The CBO said the benefits of an increase would apply to a range of workers, with 19% of the increased wages going to those living below the poverty line and 30% to people in families that earned more than three times the poverty level. Additionally, while the increase would raise income of low-wage workers by $31 billion, it would reduce or eliminate the wages of American who were let go by their employer. On net, the wage increase would raise "overall real income" by $2 billion.

Jason Furman, chairman of the White House Council of Economic Advisers, said the study "very much does make the case for a policy that benefits more than 16.5 million workers."

President Obama, who recently called on Congress to raise the minimum wage, signed an executive order raising the rate for workers on new federal contracts.

Responding to the CBO’s report, Senate Minority Leader Mitch McConnell (R-KY) said the report shows a minimum-wage rise "could destroy as many as one million jobs, a devastating blow to the very people that need help most in this economy."

Richard Trumka, president of union federation AFL-CIO, challenged the study's findings. "Every time momentum builds for lifting wages, conservative ideologues say it will cost jobs. Every time, they've been dead wrong.”

Senate Democrats said they will hold a vote to raise the minimum wage soon, though Rep. John Boehner has said he opposes an increase.