Economic effects of proposed federal minimum wage increase
| Federal minimum increased to $9.80 per hour in three increases of 85 cents, modeled for July 2012, 2013, and 2014 | |
|---|---|
| Increased wages for directly & indirectly affected* | $39,677,170,000 |
| GDP Impact** | $25,115,648,697 |
| Jobs Impact*** | 103,000 |
*Increased wages: Total amount of increased wages for directly and indirectly affected workers.
**GDP and job stimulus figures utilize a national model to estimate the GDP impact of workers' increased earnings, after controlling for reductions to corporate profits.
***The jobs impact total represents full-time equivalent employment.The increased economic activity from additional wages adds not just jobs but also hours for people who already have jobs. Full-time employment takes that into account, by essentially taking the number of total hours added (including both hours from new jobs and more hours for people who already have jobs) and dividing by 40, to get full-time-equivalent jobs added. Jobs numbers assume full-time employment requires $115,000 in additional GDP.
Source: EPI Analysis of 2011 Current Population Survey, Outgoing Rotation Group. Job impact estimation methods can be found in: Hall, Doug and Gable, Mary. 2012. The benefits of raising Illinois' minimum wage. Washington, D.C.: Economic Policy Insitutute; and Bivens, Josh L. 2011. Method memo on estimating the jobs impact of various policy changes. Washington, D.C.: Economic Policy Institute.
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