Exploring the Impact of Increasing the Federal Minimum Wage on Employment and Family Income

As discussions surrounding the federal minimum wage continue to evolve, it is important to understand the potential consequences of implementing such policies.

The Congressional Budget Office (CBO) has developed an interactive tool that allows users to explore the effects of increasing the federal minimum wage, shedding light on its potential impact on employment and family income.

This tool provides valuable insights into the nuances of policy options and their potential ramifications for different stakeholders.

The default policy option within the CBO's interactive tool is based on the Raise the Wage Act of 2023 (S. 2488), which the CBO extensively analyzed in a report titled "The Budgetary and Economic Effects of S. 2488, the Raise the Wage Act of 2023."

Under this default option, the minimum wage would incrementally increase beginning in July 2024 and reach $17 per hour by July 2029. Additionally, the subminimum wage for tipped workers would reach $17 per hour in July 2030, aligning it with the regular minimum wage the following year.

By utilizing the interactive tool, users can also create custom policy options to examine how different approaches to changing the minimum wage can impact earnings, employment levels, family income, and poverty rates.

This feature allows for a more nuanced exploration of the potential outcomes of minimum wage increases, taking into account various scenarios and factors.

The CBO report highlights that increasing the federal minimum wage has the potential to bolster the earnings and family income of low-wage workers, potentially lifting some families out of poverty.

However, it also acknowledges the potential consequence of job loss among low-wage workers, resulting in a decline in family income for those affected.

The interactive tool developed by the CBO serves as an invaluable resource for policymakers, researchers, and the general public to better understand the trade-offs associated with increasing the federal minimum wage.

It enables users to delve into the details and analyze the potential impact on different segments of the population, providing a comprehensive perspective on the issue.

It is important to note that the tool and report do not advocate for specific policy directions but instead aim to inform and provide a comprehensive analysis of the potential impact of minimum wage increases.