Report: Federal minimum wage hike would fight poverty, could kill jobs

HAZARD, Ky. (WYMT) - The midterm elections are just a few months away, and President Obama's proposal to raise the federal minimum wage is shaping up to be a big issue.

A new government report puts that debate under the microscope.

Democrats want to raise the federal minimum wage from $7.25 to $10.10 an hour, saying that will lift nearly a million people out of poverty.

Republicans say such a move could destroy that many jobs.

A new report from the nonpartisan Congressional Budget Office predicts the outcome would be somewhere in between.

Juanita Adams is a minimum-wage employee at the Circle T Restaurant in Hazard.

She says she has mixed feelings about raising the federal wage limit.

"It could be nice, but I feel that like rent will go up, food will go up, everything else will just go up with it," she said.

President Obama and congressional Democrats have made raising the minimum wage a priority ahead of the midterm elections, and if they get their way, millions of low-income Americans could soon be getting a raise.

The CBO report released Tuesday found more than 16 million people would benefit from the president's plan.

The report also shows such a move would eliminate an estimated 500,000 jobs.

"If there are more jobs and more families lifted out of poverty, the Democrats are saying you have to accept some loss to get the gain," said economics expert Richard Crowe.

Crowe says inflation has remained relatively low since the last minimum wage hike in 2009, but still the lowest earners are feeling the squeeze.

"If we didn't have those price increases over time, the minimum wage would never have to be changed, but we do," he said.

How dollars and cents translate into political points, Crowe says, remains to be seen.

The CBO report estimates a total of $31 billion in increased earnings for low wage workers under the proposed hike.

The General Assembly is considering similar legislation that would raise the Kentucky minimum wage to $10.10 an hour by July of 2016.

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