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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
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.”