$15 minimum wage would cut employment, reduce poverty, CBO study finds

President Biden and many Democrats are pursuing legislation to more than double the current federal minimum wage of $7.25 an hour in phases, saying it would lift many low-wage workers out of poverty and deliver pay increases to many essential employees during the coronavirus pandemic, including workers at grocery stores, warehouses and in delivery vans. Republicans and some businesses and economists have warned that such an increase could cost jobs as the U.S. recovers from pandemic layoffs.

While the CBO study finds poverty-reducing effects, its broader findings could make it difficult for proponents of an increase to rally enough votes among moderate Democrats and Republicans in Congress to raise the federal minimum wage for the first time since 2009.

The study reaffirms a finding that a $15 minimum wage could cost the U.S. jobs, slightly increasing a job-loss estimate from a widely cited 2019 CBO study. While many Americans would see raises, the analysis showed a minimum-wage increase would cause prices to rise, the federal budget deficit to widen and overall economic output to slightly decrease over the next decade.