The Congressional Budget Office finds that an increase in the minimum wage will result in higher unemployment:
Minutes ago, the CBO issued another stunner of a report, looking at the impact of the minimum wage boost proposal from $7.25 to $10.10 (which at least when it comes to Federal workers is nothing more than a populist gimmick since as we showed previously the average Federal worker makes nearly twice as much as the average American). The punchline: while income would be boosted for about 16.5 million workers or a grand amount of about $31 billion, “the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.” And the cherry on top: as much as an additional 1 million jobs would be lost by the end of 2016.
Zero Hedge includes the CBO chart to back this up:
Of course, the (
racist Democrat) supporters are not pleased with these projections.
But Sen. Tom Harkin (D-Iowa), the lead sponsor of the Senate bill to raise the minimum wage, took issue with the CBO’s findings.
“More than 600 economists, including seven Nobel Prize laureates, recently affirmed the growing consensus that low-wage workers benefit from modest increases in the minimum wage without negative consequences for the low-wage job market,” Harkin said.
“In fact, an analysis of the Fair Minimum Wage Act reveals that gradually raising the minimum wage to $10.10 would raise the wages of nearly 28 million low-wage workers, pumping $22 billion in the economy and—contrary to the CBO’s report— would create 85,000 jobs over three years due to increased consumer demand.”
Democrats are making the wage hike a central part of their midterm election argument, and Senate Majority Leader Harry Reid (D-Nev.) has said he will bring a minimum wage bill to the floor in the coming weeks.
You can’t fight the laws of economics. Price floors always result in surpluses, and increases in the minimum wage always result in more unemployment. Of course, that won’t stop the White House from ignoring reality:
White House dumps on CBO min wage study, says it does not reflect “consensus” of economists who see no job losses
— Jamie Dupree (@jamiedupree) February 18, 2014