CBO Weighs in on a $15 Minimum Wage

Under a $15 minimum wage, the Congressional Budget Office (CBO) estimates that 17 million workers would see higher pay — plus some smaller number who already made more than $15 but might get raises too — while 1.3 million would lose their employment.

This implies the policy would kick one person out of his job for every 13 people who got a direct pay boost. And naturally those raises don’t come from nowhere; they’re paid by businesses, which in turn earn money from customers.

Adding together the various effects — higher wages, lower employment, higher prices, etc. — the CBO estimates that, on balance, a $15 minimum wage would give $7.7 billion to folks below the poverty line, boosting their income 5.3% percent, and $14.2 billion to folks between one and three times the poverty line, boosting their income 3.5%.

Everyone above that loses a small percentage of income (0.1 to 0.3%, depending on which income group we’re talking about), but these amounts add up to $30.5 billion, meaning that the policy costs Americans in general $8.7 billion net.