NEW YORK (TheStreet) -- The Congressional Budget Office, a nonpartisan federal agency, reported Tuesday that a minimum wage hike would reduce employment and boost families' incomes.
The results come amid a debate between Democrats and Republicans in Washington as to whether the United States should increase the minimum wage requirements -- an argument that could have serious ramifications for control of the House and Senate during the 2014 midterm elections.
The CBO examined the wage-hike effects based on two scenarios: a $10.10 option versus a $9 option.
In the fully implemented $10.10 minimum, the agency found a central estimate of about 500,000 workers would lose their jobs, while boosting income for low-wage workers by $31 billion. However, the CBO said just $5.89 billion of that estimate would accrue for families living below the poverty threshold.
The likely series of employment scenarios for the $10.10 option ranged from a "very slight decrease" to 1 million jobs cuts.
In the fully implemented $9 minimum wage -- a policy President Barack Obama endorsed early last year -- the CBO reported a central estimate of about 100,000 workers would lose work, while income for families living below the poverty line would gain by $1 billion. This, the report said, would lift 300,000 people out of poverty.
Employment scenarios for the $9 option ranged from a "very slight decrease" to a loss of 200,000 jobs.
Republicans quickly endorsed the CBO report as confirmation that higher wages would hurt the labor situation.
"This report confirms what we've long known: while helping some, mandating higher wages has real costs, including fewer people working," Brendan Buck, a spokesman for House Speaker John Boehner, wrote in a statement to reporters.