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CBO: Minimum Wage Hike Could Cost Million Jobs

From the Washington Times:

Minimum wage hike would kill a half-million jobs: CBO

By Stephen Dinan and Dave Boyer | Tuesday, February 18, 2014

Raising the minimum wage to $10.10 an hour will cost the U.S. economy a half-million jobs by 2016 but will substantially boost wages for most low-income workers, according to a Congressional Budget Office report released Tuesday that adds a significant hurdle to Democrats’ push for an increase.

In fact, as noted later in this article, the CBO said raising the minimum wage to $10.10 an hour would reduce employment by between a very small amount and 1 million workers. (And, historically speaking, their worse case scenarios always turn out to be the more accurate. In fact, even still too rosy. Cf. the cost of Medicare.)

So that is up to another million jobs lost on top of the 2.5 million lost due to Obama-Care’s new offers of ‘choice.’ Meanwhile, Gallup found the other day that unemployment was by far and away the top priority for most Americans.

Stung by the findings, the White House, which is still facing a sluggish job picture five years after the recession, scrambled for a response. It praised the nonpartisan agency’s finding that low-wage workers’ income would rise but said the CBO job numbers “do not reflect the overall consensus view of economists.” …

Once again, if the White House doesn’t like what it is saying, the CBO is no longer reliable source, no longer non-partisan. And, also once again, they are hiding by some imaginary consensus.

“Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent,” the nonpartisan scorekeepers said. The report added that the uncertainty is substantial and the loss could be anywhere from “very slight” to as much as 1 million jobs.

The CBO said a wage increase would cause some businesses to cut the number of jobs to contain labor costs, although most of the working poor would benefit and many would be lifted above the poverty line.

Would any of the million people who stand to lose their jobs be knocked below the poverty line?

Overall, income would be transferred from the wealthy to the poor, CBO said…

Which, of course, is the whole point of doing this. And the motive behind just about every other Obama initiative.  Like he accidentally admitted to Joe The Plumber, Obama is obsessed  ‘Spreading the wealth around.’

White House economists tried to pick apart the CBO analysis, saying economic scholars have found that minimum wage increases don’t cause major job losses. Betsey Stevenson, a member of the White House Council of Economic Advisers, said while that goes against traditional economic teaching, there is plenty of evidence that boosting wages also increases productivity and job stability.

“I’ve been also looking at minimum wage studies since my very first days in graduate school, and I really do believe that both the profession and the literature has moved towards thinking over the last couple of decades towards thinking the employment effects are small,” she said.

Well, okay. If that’s what Betsey ‘Who?’ Stevenson says.

Several black leaders raised the issue with Mr. Obama in an hourlong meeting at the White House on Tuesday.

“The minimum wage has not kept pace with inflation,” said Marc Morial, president of the National Urban League. “The minimum wage has not kept pace with the productivity of low-income workers. The minimum wage makes good sense.” …

The last time the minimum wage was increased was late in President George W. Bush’s term. After Democrats won control of the House and Senate, Congress pushed through a gradual rise from $5.15 to the current $7.25 level…

In fact, the last minimum wage increase went into effect in 2009. And we are also told that raising the minimum wage doesn’t hurt the employment rate. But how has the unemployment rate been doing since 2009?

Also, bear in mind that Obama is now trying to practically double the minimum wage since he has been in office. Has inflation doubled under Obama? Maybe it has. But they certainly aren’t admitting it.

But speaking of inflation, how come we never hear any mention of what impact raising the minimum wage would have on inflation? And how it will make the cost of living more expensive for everything. Won’t that hurt the poor? Especially those on fixed incomes?

This article was posted by Steve on Wednesday, February 19th, 2014. Comments are currently closed.

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