The GOP Wants a $10 Minimum Wage – How Does It Compare to $15 in the Real World?
The current minimum wage in the United States is $7.25 per hour, although it is higher in many cities and states. President Biden has called for a $15 minimum wage in his stimulus package, countered by a $10 minimum wage proposal from Republican senators Mitt Romeny and Tom Cotton.
The Congressional Budget Office has done a lot of work on the effects of different minimum wage rates, based on a gradual increase to the full rate in 2025. Here’s what the CBO’s researchers have found:
$15 Minimum Wage
- 17.0 million workers would receive a raise because they make between $7.25 and $15 an hour now.
- 10.3 million workers who earn just above $15 per hour are likely to receive a raise.
- 0.9 million fewer people would be in poverty.
- 1.4 million more people would be unemployed.
- The federal government’s deficit would increase by $54 billion between 2021 and 2031, mostly due to higher wages, especially in long-term care. This would be after considering lower costs for such things as SNAP benefits due to the decrease in people in poverty.
- The net increase on wages would be $333 billion, with $509 billion in higher wages offset by $175 billion in losses due to the increased unemployment.
$10 Minimum Wage
- 1.5 million workers would receive a raise because they make between $7.25 and $10 an hour now.
- 1.9 million workers who earn just about $10 per hour are likely to receive a raise.
- There would be no change in the number of people who are in poverty.
- There would be no change in the number of people who are unemployed.
The analysis for the $10 minimum wage was prepared in 2019, when the Raise the Wage Act of 2019 was under consideration. That bill did not pass. The $15 minimum wage analysis is based on the latest research by the CBO for the Raise the Wage Act of 2021. The CBO was able to refine its data somewhat based on the experiences of states with minimum wage rates above $7.25. The new analysis doesn’t look at the $10 minimum wage.