A $15 minimum wage would result in 1.4 million jobs lost and disproportionately hurt younger workers and those with less education, a new Congressional Budget Office report said.
President Joe Biden, U.S. Sen. Bernie Sanders and other Democrats have proposed raising the federal minimum wage to $15 an hour by 2025, more than double the current federal minimum of $7.25 an hour.
Biden said such a move would lift million of Americans out of poverty. While the CBO confirms the poverty-reducing impact, it also said it would hurt the economy.
"In 2025, when the minimum wage reached $15 per hour, employment would be reduced by 1.4 million workers (or 0.9%), according to CBO’s average estimate," the report said. ... "Young, less educated people would account for a disproportionate share of those reductions in employment."
The higher minimum wage also would result in increased prices for consumers, including on health care, and businesses would be on the hook for higher unemployment premiums because more out-of-work people would seek the benefit.
“Under the bill, Medicaid spending would increase because the effects of increases in the price of health care services and increases in enrollment by people who would be jobless as a result of the minimum-wage increase would outweigh the effects of decreases in enrollment by people with higher income," according to the CBO. "Prices, such as those for long-term services and supports and medical services, would...