The Congressional Budget Office released its analysis of President Obama’s proposal to raise the minimum wage from $7.25 to $10.10 an hour by 2016.
CBO: “The increase in the minimum wage would have two principal effects on low-wage workers: The large majority would have higher wages and family income, but a much smaller group would be jobless and have much lower family income.”
Specifically, it would cost 500,000 jobs in 2016, but “would raise income for about 16.5 million workers by $31 billion, potentially pulling nearly 1 million people out of poverty,” reports The Hill.
Both sides were quick to respond:
The office of Speaker John Boehner (R-Ohio): “This report confirms what we’ve long known: while helping some, mandating higher wages has real costs, including fewer people working.”
Jason Furman, Chairman of the White House’s Council of Economic Advisers, claims the report is flawed: “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.”
Matthew Yglesias weighs in: “If the White House genuinely believes that a hike to $10.10 would have zero negative impact on job creation, then the White House is probably proposing too low a number.”
“If $10.10 an hour would raise incomes and cost zero jobs, then why not go up to $11 and raise incomes even more at the cost of a little bit of disemployment?”