CBO Report Finds $17 Minimum Wage Could Cost 1.4 Million Jobs
Nonpartisan Analysis Says Sanders’ Bill Would Hurt Poorest Families
Publication Date: December 2023
Arlington, VA – Today, the nonpartisan Congressional Budget Office (CBO) released a report detailing the economic impacts of a $17 federal minimum wage. Earlier this year, Sen. Bernie Sanders introduced S. 2488 proposing a $17 minimum wage by 2029 with full tip credit elimination.
The CBO’s report details the tradeoffs and negative consequences this legislation would have on American employees. The Employment Policies Institute’s research director Rebekah Paxton said:
“The CBO’s findings outline the inevitable tradeoff of higher wage mandates: Some employees get a pay boost while many others see their pay cut to zero when businesses are forced to downsize. Bernie Sanders’ insistence on pushing the wage target to unprecedented levels is a misguided approach that will hurt millions of employees and American families.”
According to the CBO, the proposed $17 minimum wage would:
- Cause up to 1.4 million jobs lost, many of whom would be forced out of the labor market entirely;
- Slash $86 billion in earnings for workers who lose their jobs, with losses “most concentrated” among the nation’s poorest families;
- Decrease tip income for tipped employees such as servers and bartenders;
- Be comparatively ineffective at targeting poverty: The average job loss estimate would leave 300,000 more people jobless than it would lift above the poverty line.
Read the CBO’s full report here.
The Employment Policies Institute (EPI) has tracked decades of economic research on the effects of minimum wage policy, including an estimate of the state-level impacts of Sanders’ proposal by Miami and Trinity University economists, utilizing available CBO methods. This study found Texas, Pennsylvania, North Carolina, Georgia, and Indiana bearing the brunt of job losses. Additional research shows the effects are stronger for tipped, younger and entry-level employees.