The Congressional Budget Office has come out with an analysis of what might happen if the minimum wage is increased to $10.10. That analysis consists of the following major points:
- A minimum wage increase “would significantly boost income for about 16.5 million workers, raising their income by $31 billion and potentially pulling nearly 1 million people out of poverty.”
- A minimum wage increase would also “cost 500,000 jobs in 2016.”
No one’s jaw should drop as a consequence of this finding. There will be workers who will be able to keep their jobs, and who will be able to make more money with a minimum wage increase. There will also be workers who will lose their jobs because labor will be more expensive as a consequence of a minimum wage increase.
The question, of course, is whether the benefits of a minimum wage increase outweigh the costs. In general, my answer to that question has been “no,” as the Earned Income Tax Credit has been shown to do a lot more to help the working poor than has the minimum wage. Perhaps if the employment market were robust enough, I might be willing to look a little more favorably upon the minimum wage, though losing 500,000 jobs seems to be too high a cost to pay. But with the employment market as weak as it is now, there isn’t a sand castle’s chance in an earthquake that I will be willing to back a minimum wage increase. And no responsible policymaker/pundit/wonk should back such an increase; weighing down the employment market with half a million more lost jobs is the height of irresponsibility.