Study: Minimum Wage Hike Would Boost Unemployment by 1 Million

A 35 percent hike in the federal minimum wage -- part of a Democrat-sponsored Rebuild America Act -- would boost employment by up to 1 million, two economists say.

Using Census Bureau data, the economists from Cornell and American universities studied an earlier proposal to raise the federal minimum wage to $9.50 an hour. They concluded that the policy was unlikely to have an impact on poverty: Only 11 percent of employees who would benefit from such an increase were living in poor households, and 63 percent were living in households with an income more than twice the poverty line.

The authors conservatively estimated that 467,500 employees would be priced out of a job following such an increase. In some simulations, the job loss topped 1 million.

Critiquing the wage plan put forward by Sen. Tom Harkin, D-Iowa, the Washington, D.C.-based Employment Policies Institute said, If Senator Harkin wants to boost the economy and have an impact on the countrys unemployment rate -- especially the nearly 24 percent unemployment rate for young adults -- he needs to focus on policies that lower barriers to hiring, not raise them.