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CBO compares minimum wage increase options

Senator Tom Harkin (D-IA), and Congressman George Miller (D-CA), proposed legislation in January 2014 that would raise the federal minimum wage to $10.10 per hour gradually by 2016. On Tuesday the non-partisan Congressional Budget Office released a report that the increase of minimum-wage to $10.10 an hour would cause a net loss of about 500,000 jobs, but would help 900,000 workers out of poverty. The increase would also raise the minimum cash wage for tipped workers from $2.13 per hour to $4.90 in three steps, after 2017 it would rise by 95 percent each year until 70 percent of the minimum wage.

CBO Historical Trends in Revenue and Outlays
CBO Historical Trends in Revenue and Outlays
Congressional Budget Office/Public Domain/Wikimedia

The report, compared the $10.10 per hour increase to a slightly smaller increase of $9 per hour that showed a less loss of jobs of about 100,000, it would help 7.6 million out of poverty and would increase wages for some who are making more than $9 per hour.

Currently almost half of all worker are paid state minimum wages which range from $7.40 to $9.32 per hour, depending on the state. Many states have increase of minimum wage bills pending on their books today but are slow to act.

If passed, the Harkin-Miller bill would increase the minimum wage by 39 percent over the current federal minimum wage of $7.25. During President Bush's tenure the minimum wage was raised by 41 percent. The Economic Policy Institute stated that “Raising the minimum wage to $10.10 by 2016 would return the minimum wage to roughly 50 percent of the average production worker wage.”