CBO: Minimum Wage Increase Would Have Mixed Results
The Congressional Budget Office released a report this week examining the effects of raising the federal minimum wage to $10.10 an hour, the number proposed by President Obama and the current minimum rate for federal workers. Called The Effects of a Minimum-Wage Increase on Employment and Family Income, the report found that although a hike would lift 900,000 families out of poverty, it would also reduce total employment by 500,000 workers.
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The report found proportionate results for a lower hike of $9 an hour: job loss for 100,000 workers, and 300,000 fewer families subsisting below the poverty level.
Needless to say, the report didn’t find enthusiastic support from all quarters. The New York Times reports that leading Republicans, unsurprisingly, largely agreed with its findings.
“Raising the minimum wage could destroy as many as one million jobs, a devastating blow to the very people that need help most in this economy,” says Senator Mitch McConnell of Kentucky, the Senate minority leader. “If and when Democrats try to push this irresponsible proposal, they should be prepared to explain why up to a million Americans should be kept from having a job.”
“I haven’t seen Republicans this excited about something that bucked the trend in their favor since the last poll showing Mitt Romney was about to be elected president,” Brad Woodhouse tells The Times. Woodhouse is the president of Americans United for Change, a liberal advocacy group. “But sorry to rain on their parade — one report does not a trend make.”
Jason Furman, the chairman of the White House’s Council of Economic Advisers, outright disagreed with the report’s findings, saying that it would be “perfectly reasonable” to believe that no jobs would be affected by the change.
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