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Raising minimum wage would cost 500,000 jobs, CBO finds

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A study by the Congressional Budget Office, released on Tuesday, found that if the minimum wage were to be raised to $10.10, which has been called for by Congressional Democrats and Pres. Obama, 900,000 people would be raised out of poverty, but at the cost of 500,000 jobs.

Obama had originally called for increasing the minimum wage to $9 an hour. The CBO examined what would happen if the minimum wage was raised to either $9 or $10.10. The CBO found that 300,000 people would be lifted out of poverty, but 100,000 new jobs would be lost, if it were raised to $9.

The study was widely criticized by Democrats, who have been pushing for a higher federal minimum wage in an attempt to improve the economy.

“Zero is a perfectly reasonable estimate of the impact of the minimum wage on employment,” said Jason Furman, chairman of the Council of Economic Advisers.

“What's more, in past years, the CBO itself has acknowledged the uncertainty of its own predictions and ignored new perspectives in the wide array of analysis on the minimum wage,” said House Minority Leader Nancy Pelosi, D-Calif.

Many economists have come out in support of an increased minimum wage, but not all agree that it would be a good idea.

While the Democrat-controlled Senate is likely to approve a plan for an increased wage, it will most likely have a difficult time in the Republican-controlled House.

When Congress returns from recess on Feb. 24, the House Democrats are going to be looking to force a vote on the issue.

In order to do this, the Democrats are planning to use what's called a discharge petition, which would require “the minority party — in this case, Democrats, who are unable to dictate the House agenda — to persuade some two dozen Republicans to defy their leadership, join Democrats and force a vote on setting the federal minimum wage at $10.10 an hour,” explains Donna Cassata, writing for the Associated Press.