Report: Minimum Wage Hike Would Lift Earnings But Cost Jobs

A report from the nonpartisan Congressional Budget Office enters a polarizing political debate

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US President Barack Obama speaks on the economy at the Safeway Distribution Center in Upper Marlboro, Maryland, on February 18, 2014

President Barack Obama’s plan to increase the federal minimum wage would raise earnings for millions of Americans and lift almost one million out of poverty, but would also cost the economy hundreds of thousands of jobs, according to a new report.

The report released Tuesday by the nonpartisan Congressional Budget Office said that hiking the minimum wage from $7.25 per hour to $10.10 per hour would increase earnings for 16.5 million workers by the second half of 2016 and would create some jobs as higher-wage workers had more money to spend. But it would also reduce total employment by about 500,000 workers, or about 0.3 percent, the CBO said.

Obama and congressional Democrats have been trying to make the minimum wage a key issue ahead of the 2014 midterm elections, arguing that the federal government should do more to combat income inequality. Obama said during his State of the Union address last month that he would issue an executive order raising the minimum wage for a limited number of federal contractors, but an increase in the minimum wage for all workers requires congressional action.

Republicans have opposed a minimum-wage hike as destructive to the economy, and both sides used the new report to hammer home their points on Tuesday.

“This report confirms what we’ve long known: while helping some, mandating higher wages has real costs, including fewer people working,” said Brendan Buck, a spokesman for House Speaker John Boehner. “With unemployment Americans’ top concern, our focus should be creating—not destroying—jobs for those who need them most.”

White House Press Secretary Jay Carney responded to continued Republican opposition by pointing to “ample documentation from respected economists who say the opposite, that there is not evidence that it has a significant impact on jobs and that, to the contrary, it’s beneficial to the economy and to efficiency and productivity.” White House senior adviser Dan Pfeiffer said a natural extension of the GOP’s argument would be to cut wages deeply.

The CBO’s latest report is sure to be a point of continued political wrangling in the months ahead. House Minority Leader Nancy Pelosi said in a statement that “no matter how the critics spin this report, the CBO made it absolutely clear: raising the minimum wage would lift almost one million Americans out of poverty.”

A smaller minimum wage hike to $9 per hour—the plan Obama floated last year—would have a less dramatic effect on the economy, CBO projected, with 7.6 million Americans seeing a rise in wages and overall employment declining by 100,000 workers.


The amnesty of illegals in the 1980s happened under Reagan who wanted to exploit cheap labor. Those that complain about construction companies using lower-paid illegal construction workers should attack the construxction companies that profit from it. All in all, in California, mostly Hispanics work in agriculture which white and blacks do not want to work in as the pay is low and teh work is very hard.

How many of your smug, right-wing twits have ever worked in agriculture or even done any serious physical work? Get real. Hispanic laborers have been an overall benefit to the cost of food which people take for granted. As more GOP fight against illegal laborers more fruits and vegetables will continue to be imported from Mexico without the FDA inspector oversight.

There has always been prison labor. Yet, now, there are 100 private prisons and our prison population went from 250,000 in 1971 under Nixon and now is over 2.3 million thanks to Nixon's failed $2 trillion "War on on Crime and "War on Drugs" with another five million on probation aor parole.

Prison labor amounts to nearly half with figures as high as one million. Pay ranges from 23 cents to 4.25 per hour, some imates receive time off in lieu of pay, and many are paid nothing. Inmates are not just making license plates, but furniture, jeans, bullet proof vests, operating farms, working with animals, etc. Look it up.


"...hiking the minimum wage from $7.25 per hour to $10.10 per hour would increase earnings for 16.5 million workers by the second half of 2016 and would create some jobs as higher-wage workers had more money to spend. But it would also reduce total employment by about 500,000 workers, or about 0.3 percent, the CBO said."

Recall that in 1960 the minimum wage was around $1 hour an hour yet it has been raised many times and overall created many millions of jobs.

That raising the minimum wage will hurt jobs has been the standard argument the greedy rich GOP use each time in opposition but it has never panned out. Overall, raising the minimum wage creates more jobs as working class wages go into the consumer-driven economy rather than the wealth investment of the rich top one-percent that the GOP love to call the "job-creators" which of course is a bold-faced lie. 

Further by raising the minimum wage, taxpayers do not continue to pay for the welfare that the working poor that work for WalMart, McDonalds, and other retail, fast food, hospitality, and other low-wage jobs where those with families cannot make ends meet without Food Stamps, Headstart, rent assistance, etc.


Here's another way to lower wages, import millions of illegal, uneducated workers to flood the labor market.  Just sayin'.


They are already here as undocumented immigrants and many have been here for decades and are not collecting welfare or other federal government assistance. The other source, that particularly the GOP use, are the privatized prison systems using ultra-low wage, captive labor that does take away US jobs in manufacturing from jeans, to furniture, to license plates, and agriculture.


@ThomasHall "They are already here as undocumented immigrants and many have been here for decades"

No kidding?  I live in S. California.  After the last amnesty, millions of additional illegals flooded into the labor force, lowing the wages of skilled and unskilled labor, and forcing construction contractors to match low bids put up by other contractors who hired illegals. 

California has the highest welfare roles in the nation.  The population growth in California is from non-US citizens; you do the math.

I don't know where you heard the fairy tale about prison labor, but you can't be serious.


The problem with this Time writer and others who advocate for a min wage increase to a “living wage,“ is that each time it has been raised, it has never “done the job“; it has never yet reached, to those who continue to say it should go higher, a “living wage.“ Will, to these people, we ever reach that so called "living wage?"

Remember the fast food workers one-day strike for a wage of $15 dollars an hour? Well, many like to look to Europe for how an economy should be run; however, there may be an indication from Europe about min wage jobs and job cuts in the fast food area.

In the US, over 80% of McDonald's restaurants are owned by individuals and not by McDonald‘s “greedy execs" as a corporation. Some individuals own more than one franchise, but many only own one, especially in small US towns.

Most franchise owners don't make "big bucks" in yearly income. Many of the CEO wages often cited are not applicable to most franchise owners no matter which “brand“ of restaurant they own.

As for min wage, today in "euro-using" European countries (18 nations now use the euro), some fast food restaurants, in part, because of different languages spoken, are replacing front counter workers/"order takers" with I-pad screens with pictures of the items and the option to change the language displayed with the touch of a finger and then place an order with no human involved.

If the min wage gets too high in the US, don't be surprised if US fast food outlets endup doing the same thing. More technology; fewer min wage workers!

Yes, the “raise the min wage” polls track well, but it also depends on how the question is asked. It there’s a loss of jobs component, or a cut in hours, or benefits, or higher prices to customers in the “raise the wage” question, it does not poll as well with most Americans.


The average McDonald's hourly salary is $8.80 the CEO hourly salary is $6,800 or 880 times. Do a Google search of the top low-wage companies and their CEO comparison. Anybody who had to work in low wage jobs even temporarily knows how you cannot get ahead.

Thanks to the GOP-Reagan-to-present failed "trickle-down economics" incomes for teh top one percent went up 275% from 1979-2006-on, and while the Middle Class shrank by 25% and wages for the 99% stagnated. Since the 1970s, 60,000 manufacturers have gone overseas or to Mexico, five million manufacturing jobs have been shipped overseas under Bush-Cheney alone while over $400 billion in taxes goes uncollected from thousands of offshore corporate tax dodgers.

As unions declined with the loss of manufacturers so has pay and benefits. Those jobs went to countries paying $1-3 per hour, $28 per month in Bangladesh, 30 cents per hour in Vietnam. Who in America can compete with those pay scales even US captive prisons and privatized prisons pay better.

What can one say about dull, bigoted, working class GOPeons who still blindly support the GOP which has historically NEVER represented the working class but instead the rich and rich corporations that want to exploit workers at every turn for money while receiving massive tax breaks in the process.



So, "since the 1970s..." only GOPers have been in office?  Reagan, had "Trickle-down economics"; and JFK had, "a rising tide lifts all boats."  

Average family income has dropped precipitously during the Obama administration.  Did your family get that $2,500 drop in health insurance premiums?; If you like your health insurance...were you able to keep both?

So, who did Barack Obama play golf with last weekend?  (Was this person "rich"?  Did he own a "rich corporation"?  Does he have large investments off shore?) 

Apple creates in the US, but where does it manufacture?  Microsoft creates in the US, but where does it manufacture?  Politically, who do the CEOs of these two companies support?  Under who's "leadership" did the "tech bubble" occur?   Who's given tax breaks to failed green-energy companies in the millions?

Which jobs have you had that you were forced to take? 

Your foolish rant is wasted words; it's claptrap!


I did jury duty yesterday with a woman who works at Chili's. She earns tips. She's a single mom, no car. Her holiday indulgement was a Coach tote. Her daughter's Christmas gift was a box with new pajamas, a holiday DVD and popcorn as filling). I don't think she or any other waitress makes up the minimum wage in tips. Her estimate is $4.00/hour. Oh, no health insurance either since last time she looked at Medicaid (pre-ACA) she didn't qualify. I urged her to look now and hope she can find something affordable.

People like that need to be lifted out of poverty. They work hard for themselves and their families. She did not want to be dependent on the state. She was doing her civic duty and had she been put on the jury would have been worse off by the loss of income (since she doesn't have an income from her employer she isn't covered by the mandate that employers pay $50/day in this state).

Our large employers need to pay a fair, livable wage to their employees. I don't care if the next time I go to Chili's I pay a couple dollars more for my meal. Really. Do you? As long as it goes to the waitress who serves me and not the CEO's bonus.

Oh, and you can't export that job either!