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Tuesday, February 18, 2014

BREAKING--CBO: Minimum Wage Increase Will Cost 500,000 Jobs

The non-partisan Congressional Budget office confirmed GOP fears about a minimum wage increase. According to the report embedded below, the Democratic Party proposal to increase the minimum wage to $10.10 from $7.25 would reduce employment by 500,000 workers by 2016, but that low-wage workers still employed would see their incomes boosted.

The report looks at two options:

  • The first would raise the wage in three steps every year through 2016 on July 1, to $10.10. Once the $10.10 wage is in effect, it would rise with inflation. CBO found that the range of job losses under this option would most likely be around 500,000 people. It estimated that 16.5 million workers would see their incomes rise, no  consolation to those who lost their jobs. 
  • Option two increases the minimum wage to $9 per hour over the two years, without indexing it to inflation. This option would only kill 100,000 jobs.
It will be interesting to see how the Democrats who used the "non-partisan" CBO reports to sell Obamacare, react to a CBO report which disagrees with their policy.

The full CBO Report follows

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