the staff of the Ridgewood blog
Ridgewood NJ, CBO analyzes the Raise the Wage Act of 2021 as introduced in the Senate on January 26, 2021. It would take effect on the first day of the third month after the date of enactment. If it was enacted at the end of March 2021, the minimum wage would increase by a set amount each year, starting in June 2021, until it reached $15 in June 2025.
The wage increase would lead 1.4 million workers losing their jobs, increased cost of goods in industries dependent on low wage employees , small business and a slight reduction in the GDP.
CBO projects that, on net, the Raise the Wage Act of 2021 would reduce employment by increasing amounts over the 2021–2025 period. In 2025, when the minimum wage reached $15 per hour, employment would be reduced by 1.4 million workers (or 0.9 percent), according to CBO’s average estimate. In 2021, most workers who would not have a job because of the higher minimum wage would still be looking for work and hence be categorized as unemployed; by 2025, however, half of the 1.4 million people who would be jobless because of the bill would have dropped out of the labor force, CBO estimates. Young, less educated people would account for a disproportionate share of those reductions in employment.
Raising the minimum wage would slightly reduce real GDP, primarily because of reduced employment. However, CBO incorporated the assumption that the bill would not change nominal GDP from the amounts in the agency’s baseline budget projections, following a practice that is conventional for its cost estimates. As the next section describes, CBO’s estimates of the effects of the bill on the GDP price index (and other price indexes) were adjusted to be consistent with that assumption.
In CBO’s assessment, the Raise the Wage Act of 2021 would change the relative prices of goods and services. The largest price increases, relative to the average increase, would be for goods or services whose production required a larger-than-average share of low-wage work, such as food prepared in restaurants. For goods and services that used less low-wage labor in their supply chains, prices would rise less.
https://www.cbo.gov/system/files/2021-02/56975-Minimum-Wage.pdf
another democrat disaster