AP
The CBO said in its report that there is a great deal of uncertainty associated with the projection. The office projected a two-thirds chance of the minimum-wage hike's effect being between a "very slight" reduction in jobs to about 1 million jobs. The 500,000 number is just the central estimate.
House Speaker John Boehner's (R-Ohio) office pounced on the report to say that a minimum-wage increase would be a job-killer.
"This report confirms what we've long known: while helping some, mandating higher wages has real costs, including fewer people working," said Brendan Buck, a spokesman for Boehner. "With unemployment Americans' top concern, our focus should be creating - not destroying - jobs for those who need them most."
The CBO also said that 16.5 million people will see a rise in incomes as a result of the possible hike, something on which Democrats immediately seized.
A $10.10 minimum wage would lift 900,000 people above the poverty threshold of $24,100 a year for a family of four, according to the report - a number Democrats seized on. And families in poverty would experience about a $5 billion increase in real income.
"No matter how the critics spin this report, the CBO made it absolutely clear: raising the minimum wage would lift almost one million Americans out of poverty, increase the pay of low-income workers by $31 billion, and help build an economy that works for everyone," House Speaker Nancy Pelosi said in a statement.
The CBO also projected that some higher-wage workers would owe jobs and increased wages to the minimum-wage hike, as it would lead to increased demand for goods and services resulting from the increase.
Here's a chart from the CBO that summarizes the effects of the possible minimum-wage hike to $10.10:
CBO
The current minimum wage is $7.25 an hour. A minimum-wage increase is set to be debated in the Senate as soon as next month.