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[WASHINGTONTIMES] Raising the minimum wage to $10.10 will cut about a half-million jobs out of the economy by 2016, according to a new Congressional Budget Office report Tuesday that could deal a major blow to Democrats' chief domestic agenda item this year.
A majority of low-wage workers would see their pay rise thanks to the increase and would be substantially better off, including many who would be lifted above the poverty line. But a minority would also lose jobs as businesses choose to invest elsewhere, the CBO said in its analysis of a proposal very similar to the one congressional Democrats have offered.
"Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent," the nonpartisan scorekeepers said, adding that there is substantial uncertainty and the loss could be anywhere from "very slight" to as much as 1 million jobs.
The $10.10 minimum wage increase the CBO looked at involved raising the rate in three steps from $7.25 an hour now to the full $10.10 on July 1, 2016. That increase would also be indexed to inflation thereafter, and workers whose wages are based on tips would also see an increase.
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