Minimum wage study shows more are better off the closer you get to $15

So here’s the high-level summary of what the CBO had to say about what would happen if the minimum wage was raised to 3 different levels.

In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO’s median estimate. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million.

• The $12 option would have smaller effects. In an average week in 2025, it would increase wages for 5 million workers who would otherwise earn less than $12 per hour. Another 6 million workers otherwise earning slightly more than $12 per hour might see their wages rise as well. But the option would cause 0.3 million other workers to be jobless. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 0.8 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 0.4 million.

• The $10 option would have still smaller effects. It would raise wages for 1.5 million workers who would otherwise earn less than $10 per hour. Another 2 million workers who would otherwise earn slightly more than $10 per hour might see their wages rise as well. The option would have little effect on employment in an average week in 2025. There is a twothirds chance that the change in employment would be between about zero and a decrease of 0.1 million workers. This option would have negligible effects on the number of people in poverty.

The job effects are what’s getting the largest attention. The GOP/Koch types are pointing to the CBO’s estimate of 1.3 million fewer workers as a reason not to consider raising the minimum wage to $15 over the next 6 years.

While Republican policies have led to amazing wage growth all across America, Democrats continue to push their job-killing regulations. https://t.co/wFDa5CrbGg

— Sean Duffy (@RepSeanDuffy) July 9, 2019

But what the Koched-up Duffy doesn’t want to talk about is how the CBO says many more people at the lower end of the wage scale would be better off.

…in an average week in 2025, the $15 option would increase the wages of 17 million workers whose wages would otherwise be below $15 per hour, CBO estimates. The wages of many of the 10 million workers whose wages would be slightly above the new federal minimum would also increase.

This table in the CBO report goes into greater detail. As you can see, families that make 300% of poverty or less (around $79,000 for a family of 4 in 2018) would have notably higher incomes if the wage was raised to $15 an hour, while rich people would be slightly worse off as prices slightly rise and profits are limited.

This other chart is also intriguing, as it shows that there is no major effect on most people’s economic outcomes until you get the minimum wage to $15. Even raising the wage to $12 only causes minor effects, and a $10 minimum wage changes nearly nothing.

So if there’s little difference in moving the minimum wage to $10, why is a state like Wisconsin is still stuck at the US minimum of $7.25? It's absurd at this point. In fact, the evidence shows that a $15 an hour minimum wage is a net gain for the overwhelming number of Americans, and if you're concerned over job losses, then have universal health care as a stabilizer so that people can have more options in looking for work, and can handle short-term unemployment in an easier way.

Plenty to look at with this CBO study, and it’s a relatively easy read. Here’s the link again, and feel free to pass it ahead to those who might be interested.