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WASHINGTON, D.C. -- The push to raise the federal minimum wage could help lower-paid workers but have negative effects on the job market, according to the Congressional Budget Office (CBO).
The CBO's report comes as President Barack Obama proposed to raise the federal minimum wage to $10.10 per hour-- phased in over three years. Congressional budget analysts on Tuesday revealed the move would increase earnings for 16.5 million low-wage Americans but cost the nation about 500,000 jobs, according to a report by The Washington Post.
The federal minimum wage currently stands at $7.25 per hour.
The CBO report also stated that approximately 15 percent of the nation's workforce would see wages rise under the proposal. In addition to the 16.5 million people who earn less than $10.10 an hour, as many as 8 million workers whose earnings hover above that level could also benefit, the newspaper reported.
While the wage hike would push an estimated 900,000 people above the poverty line, the CBO said that raising the minimum wage could also cause employers to lay off low-wage workers or hire fewer of them, reducing overall employment by about 500,000 jobs, or about 0.3 percent of the labor force.
The CBO acknowledged that its calculation is an estimate and said actual job losses could range from "very slight" to as many as 1 million positions, the newspaper report added.
"The increase in the minimum wage would have two principal effects on low-wage workers," the CBO said in the report. "The large majority would have higher wages and family income, but a much smaller group would be jobless and have much lower family income."
"Today's CBO report confirms that raising the minimum wage is in the best interest of our country," Rep. Chris Van Hollen (D-Md.), the senior Democrat on the House Budget Committee, said in a written statement.
Standing on the other side of the issue, Senate Minority Leader Mitch McConnell (R-Ky.) stated that the elimination of as much as 1 million jobs would be "a devastating blow to the very people that need help most."
To read the full CBO report, click here.