The Congressional Budget Office released their report Tuesday on the impacts of raising the minimum wage to $10.10 per hour.
Republicans, who voted unanimously in the House last year against raising the minimum wage, interpreted the report as saying a wage increase would kill 500,000 jobs, but it’s not that cut and dried.
A portion of the CBO report indicated that a $10.10 increase could likely result in a near-net zero effect by the end of 2016.
In addition, Jason Easley explained it this way in his PoliticusUSA article, “the CBO’s conclusion on employment is that there could be a negative effect, or a zero effect. The CBO report is not a definitive statement that raising the minimum wage will kill jobs. In fact, the research on unemployment as summarized by seven Nobel Prize winners and 600 economists found that moving to $10.10 an hour will have little or no impact on employment.”
The White House also questions some assumptions made by the CBO report.
Chairman of the WH Council of Economic Advisors Jason Furman found some of the findings to be flawed.
“CBO’s estimates of the impact of raising the minimum wage on employment does not reflect the current consensus view of economists,” he said in a blog post. “The bulk of academic studies, have concluded that the effects on employment of minimum wage increases in the range now under consideration are likely to be small to nonexistent."
However, Furman did point out the main highlights of the report, which estimates that over 16.5 million people would benefit from a pay raise and that it would lift 900,000 people out of poverty.
Moreover, Bob Greenstein of the Center for Budget and Policy Priorities explained that sources used by the CBO were not of the highest standard and pointed out that even accepting the flawed job loss estimates would mean help for “50 times as many workers as those hit by job losses.”
But Republicans have honed in on the job-killing talking point as the focus of their relentless war on the poor. They have contended that minimum wage workers are primarily teenagers, but CBO’s report doesn’t substantiate that assertion, finding that only 12 percent of minimum wage earners are teens.
Meanwhile, the state of Washington, which has already seen the city of Sea Tac vote in a minimum wage increase of $15.00 per hours, is considering the same increase state-wide and it is getting support from an unexpected source.
One of Seattle’s most notable venture capitalists and 1 pecenter , Nick Hanauer, supports a $15.00 minimum wage hike.
Jim Brunner of the Seattle Times noted that Hanauer is against the conservative mantra that wealthy people are the “job creators”, because; “Prosperity isn’t something that squirts out of rich people.”
President Barack Obama originally wanted a wage increase from $7.25 to $9.00 per hour, but had little trouble getting behind Democrats' call for it to be $10.10.
Democrats and Republicans alike will be gearing up for a minimum wage battle during the 2014 mid-term elections and it will come down to the same issue it always does; the rich vs the poor.