It’s impossible to predict exactly what will happen if businesses need to pay some employees more than the current $7.25 minimum federal rate. Will they fire some employees to cover the added cost? Will they make customers pay the difference? Will they just decrease benefits? No one can know for sure.
To get an idea, economists look at what has happened in cities and states that have raised minimum pay. The most
recent research shows that wage hikes lead to minimal — or zero — job losses.
The CBO report doesn’t necessarily contradict those findings. But it does include a much wider range of scenarios. Yes, there’s a good chance no jobs will disappear, but there’s also a good chance that 3.7 million jobs could. So their median estimate is 1.3 million losses.