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The Effects on Employment and Family Income of Increasing the Federal Minimum Wage

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  • Congressional Budget Office

Abstract

The federal minimum wage is $7.25 per hour for most workers. In this report, CBO examines how increasing the federal minimum wage to $10, $12, or $15 per hour by 2025 would affect employment and family income. Increasing the minimum wage would have two principal effects on low-wage workers. For most low-wage workers, earnings and family income would increase, which would lift some families out of poverty. But other low-wage workers would become jobless, and their family income would fall—in some cases, below the poverty threshold.

Suggested Citation

  • Congressional Budget Office, 2019. "The Effects on Employment and Family Income of Increasing the Federal Minimum Wage," Reports 55410, Congressional Budget Office.
    • Handle: RePEc:cbo:report:55410
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    File URL: https://www.cbo.gov/system/files/2019-07/CBO-55410-MinimumWage2019.pdf
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    References listed on IDEAS

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    6. Sylvia A. Allegretto & Arindrajit Dube & Michael Reich, 2011. "Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(2), pages 205-240, April.
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    Citations

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    Cited by:

    1. Jeffrey Clemens, 2021. "How Do Firms Respond to Minimum Wage Increases? Understanding the Relevance of Non-employment Margins," Journal of Economic Perspectives, American Economic Association, vol. 35(1), pages 51-72, Winter.
    2. Price V. Fishback & Andrew J. Seltzer, 2021. "The Rise of American Minimum Wages, 1912–1968," Journal of Economic Perspectives, American Economic Association, vol. 35(1), pages 73-96, Winter.
    3. Julia F. Lippert & Mackenzie B. Furnari & Charlie W. Kriebel, 2021. "The Impact of the COVID-19 Pandemic on Occupational Stress in Restaurant Work: A Qualitative Study," IJERPH, MDPI, vol. 18(19), pages 1-15, October.
    4. Ian Fillmore, 2021. "A $15 Federal Minimum Wage is Outside Historical Experience," Working Papers 2021-048, Human Capital and Economic Opportunity Working Group.
    5. Skedinger, Per, 2022. "The Economics behind the Directive on Adequate Minimum Wages in the EU: A Critical Assessment," Working Paper Series 1438, Research Institute of Industrial Economics.
    6. Michael R. Strain, 2021. "An Argument Against The $15 Minimum Wage," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(4), pages 1289-1297, September.
    7. Koen Steenks & Arjan Heyma & Tobias Vervliet, 2025. "The Effects of Dutch Youth Minimum Wage Increases on Income Inequality," De Economist, Springer, vol. 173(2), pages 299-330, July.
    8. Reg HAMILTON & Matt NICHOL, 2023. "One hundred years of dynamic minimum wage regulation: Lessons from Australia, the United Kingdom and the United States," International Labour Review, International Labour Organization, vol. 162(3), pages 407-429, September.
    9. George L. Wehby & Robert Kaestner & Wei Lyu & Dhaval M. Dave, 2022. "Effects of the Minimum Wage on Child Health," American Journal of Health Economics, University of Chicago Press, vol. 8(3), pages 412-448.
    10. Fenstemacher, Kory Alan & Fisher, Jared Harrison & Hadzalic, Zerina & Hillebrandt, Brenda, 2019. "Estimating the Economic Impact of Increases in the Minimum Wage," SocArXiv xduw4, Center for Open Science.
    11. Fillmore, Ian, 2022. "A $15 federal minimum wage is outside historical experience," Research in Economics, Elsevier, vol. 76(1), pages 84-92.
    12. Richard V. Burkhauser & Drew McNichols & Joseph J. Sabia, 2023. "Minimum Wages and Poverty: New Evidence from Dynamic Difference-in-Differences Estimates," NBER Working Papers 31182, National Bureau of Economic Research, Inc.
    13. Darius Daniel Martin, 2021. "The Minimum Wage in a Roy Model with Monopsony," Journal of Labor Research, Springer, vol. 42(3), pages 358-381, December.
    14. Elias Ilin & Ellyn Terry, 2022. "Estimating Occupation and Location Specific Wages over the Life Cycle," Business and Economic Research, Macrothink Institute, vol. 12(2), pages 46-60, December.
    15. Jeffrey Clemens & Michael R. Strain, 2023. "How important are minimum wage increases in increasing the wages of minimum wage workers?," Contemporary Economic Policy, Western Economic Association International, vol. 41(4), pages 594-612, October.
    16. Ms. Enrica Detragiache & Mr. Christian H Ebeke & La-Bhus Fah Jirasavetakul & Koralai Kirabaeva & Mr. Davide Malacrino & Florian Misch & Mr. Hyun Park & Ms. Yu Shi, 2020. "A European Minimum Wage: Implications for Poverty and Macroeconomic Imbalances," IMF Working Papers 2020/059, International Monetary Fund.

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    More about this item

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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