A minimum wage proposal by Sen. Bernie Sanders (I-VT) would cut the number of impoverished people by hundreds of thousands but cause even more lost jobs, according to a new analysis from Congress's scorekeeper.
The plan, which Sanders introduced in May, would hike the minimum wage over time, with the wage finally increasing to $17 by 2029. The Congressional Budget Office found that the Sanders plan would cause about 0.4% of the entire U.S. workforce to be cut.
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The CBO said the minimum wage proposal would help alleviate poverty, reducing the number of people in poverty by 400,000. But, because employers would be forced to pay workers more, they would end up cutting some 700,000 jobs across the economy.
The ambitious proposal, which has essentially no chance of passing during this Congress, would affect a wide swath of the workforce, the CBO found.
“In an average week in 2029, the year when the minimum wage would reach $17 per hour, 8.9 million workers whose wages would otherwise be below $17 per hour would be directly affected; many of the 9.7 million workers whose wages would otherwise be slightly above that wage rate would also be affected,” the report reads.
The plan would also result in higher budget deficits. The bill would increase the deficit by nearly $60 billion over the next decade.
The federal minimum wage was last increased in 2009 and now sits at $7.25 per hour. Sanders long backed a $15 federal minimum wage, but he is now pushing for $17 as an appropriate floor given high inflation.
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Proponents of higher minimum wages say that the federal threshold is so low that it results in poverty for many families. The federal minimum wage has lost nearly 30% of its purchasing power since it was last raised in 2009, according to the Economic Policy Institute.
But opponents argue that minimum wage increases reduce employment, especially among lower-skill workers, and increase inflation.