CBO: Raising the minimum wage to $10.10 an hour could eliminate 500,000 jobs by 2016

posted at 3:21 pm on February 18, 2014 by Allahpundit

I’m treating it as good news. At least 500,000 people won’t have to worry about “job-lock” now.

There’s no problem here that indefinite unemployment benefits can’t solve, my friends.

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers

The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.

Moreover, the increased earnings for some workers would be accompanied by reductions in real (inflation-adjusted) income for the people who became jobless because of the minimum-wage increase, for business owners, and for consumers facing higher prices.

So more than 80 percent of the gains in earnings will go to people other than the very poorest, and meanwhile as many as a million people potentially could end up being laid off. When you net out all the income created and lost by this disruption, says CBO, you come up with a modest gain of $2 billion, or about what the feds spend in four hours on a given day. AEI’s Michael Strain visualizes the trade-off this way:

And as icing on the cake, per CBO, while hiking the minimum wage would reduce deficits slightly in the near term, it would have the opposite effect as the timeline gets farther out. I realize there’s an apples-and-oranges element in comparing this to workers voluntarily leaving the labor force under ObamaCare, but put the two together and we’re now looking at three million jobs disappearing from Obama initiatives on top of the many millions that disappeared over the past five years during and after the recession. What exactly is our employment target at this point?


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dentarthurdent on February 18, 2014 at 9:57 PM

If that is the case, tell us why the senator from Tennessee had to threaten the workers and company then? Tell us why he said he would make sure all their subsidies were gone if they unionized?

loveofcountry on February 18, 2014 at 10:01 PM

Sea life is not fair. I like that.

rogerb on February 18, 2014 at 10:01 PM

If that is the case, tell us why the senator from Tennessee had to threaten the workers and company then? Tell us why he said he would make sure all their subsidies were gone if they unionized?

loveofcountry on February 18, 2014 at 10:01 PM

Is Tennessee a right to work state? Why would they want a union to ruin workers’ right to work?

Tell us why the union had to call people at night and threaten them into voting for the union.

dentarthurdent on February 18, 2014 at 10:03 PM

BTW – the unions in Germany operate very differently from how they operate in this country. In Germany they are actually concerned about not destroying the companies the work for.

dentarthurdent on February 18, 2014 at 9:57 PM

The entire country of Germany is “right to work.” Forced unionization is illegal there. “Right to work” is common sense. That must be why the American Lefties reject it here on our shores.

Why do American Progressives hate American workers? Why are the Progressives anti-choice?

tobes on February 18, 2014 at 10:05 PM

The UAW is a joke, and I saw that as a dues payer. It’s just a racket to extract money from the employed to lobby for and donate to democrats.

That is it. Period.

Murphy9 on February 18, 2014 at 10:07 PM

The entire country of Germany is “right to work.” Forced unionization is illegal there. “Right to work” is common sense. That must be why the American Lefties reject it here on our shores.

Why do American Progressives hate American workers? Why are the Progressives anti-choice?

tobes on February 18, 2014 at 10:05 PM

Huh?
Sorry, I don’t know you. Are you misunderstanding what I’m saying?
Of course lefties reject right to work. They want everyone paying homage to the unions.

dentarthurdent on February 18, 2014 at 10:07 PM

I’m pretty sure the VW workers didn’t want a two-tier pay scale like your beloved UAW shopped you imbecile loveofstupidity.

Murphy9 on February 18, 2014 at 10:08 PM

The Bush Tax Cut recovery, which raised both employment levels (from 62.0% in September 2003 to 63.4% in December 2006) and revenues (FY 2007 revenues were up a whopping 44% larger than FY 2003 revenues!) came to a sudden end when Democrats took control of both houses Congress on January 3, 2007.

What did Democrats do?

On January 5, 2007, just two days into the new Democrat majority, Democrats introduced a bill to raise the minimum wage three times in three years. That bill was eventually passed as a rider to troop funding (the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007), and the minimum wage was raised three times in three years, from $5.15 per hour to $7.25 per hour (a more than 40% increase in 3 years).

==============================================
EACH time that the Democrat majority raised the minimum wage, EMPLOYMENT DROPPED!
==============================================

The Democrat majority raised the minimum wage:

1) Up $0.70 to $5.85 per hour on 2007-07-24,
2) up $0.70 to $6.55 per hour on 2008-07-24,
3) up $0.70 to $7.25 per hour on 2009-07-24.

… and the Employment-Population ratio dropped to:

62.9% in July 2007,
62.2% in July 2008,
59.3% in July 2009,

and has been BELOW 59.0% for 53 consecutive months (nearly FOUR AND HALF YEARS) September 2009 – January 2014!

(And of course, Obama and many Democrats want to foolishly raise the minimum wage AGAIN now, to $10.10/hr!)

ITguy on February 18, 2014 at 10:10 PM

If increasing the minimum wage which every poor working American and compassionate middle class American wants will hurt the poor American, why don’t you do it and let them hurt themselves then? After all, they are only hurting themselves right? Who died and made you God of telling people what is good for them and what is not?

loveofcountry on February 18, 2014 at 9:31 PM

Well, increasing the minimum wage is not what every poor working American and compassionate middle class American wants. It’s what Unions and Democrats want because they want people to be dependent on them so they maintain power and continue to suck money out of the economy and government.

If raising the minimum wage were put to a national referundum and it passed, that would be one thing. For a bunch of idiots like Obama, Pelosi and Reid to force it on the country, continuing their economy destroying ways is something every thinking American should oppose.

Also, clearly they are not only hurting themselves. The top 40% of earners are paying 108% of taxes. ( The bottom get more back than they pay in taxes) It’s not the working poor or lower middle class that will be paying the costs for this inane experiment.

More jobs, now!

What do we want?
Jobs!
When do we want them?
Now!
I have way too many 20 something relatives that are underemployed to watch a bunch of economic imbeciles push unemployment higher.

talkingpoints on February 18, 2014 at 10:10 PM

Huh?
Sorry, I don’t know you. Are you misunderstanding what I’m saying?
Of course lefties reject right to work. They want everyone paying homage to the unions.

dentarthurdent on February 18, 2014 at 10:07 PM

I agree with you and was trying to add to your point… Sorry I wasn’t clear.

tobes on February 18, 2014 at 10:11 PM

dentarthurdent on February 18, 2014 at 10:03 PM

I see you are a big government tea partier. Didn’t even know they existed. Because only a big government tea partier would support government officials threatening a private business. Only a big government conservative would equate a union lobbying to get more members to join the union with politicians threatening a private business.

loveofcountry on February 18, 2014 at 10:19 PM

I agree with you and was trying to add to your point… Sorry I wasn’t clear.

tobes on February 18, 2014 at 10:11 PM

OK – gotcha.
A lot of new people – still trying to sort out positions and sarc levels…..

dentarthurdent on February 18, 2014 at 10:21 PM

Well the American people voted to elect Barry their president twice. The American people spoke twice.

loveofcountry on February 18, 2014 at 9:58 PM

Based on the relentless lies by the American media.

Benghazi was a spontaneous protest in response to a Youtube video.
If you like your plan you can keep your plan.
Insurance premiums will come down $2500 per family.
Etc., Etc.

GIGO.

Plus, there is a significant percentage of people that vote for Obama because of his race and would vote for him if employment were 0%, and the US suffered a terrorist nuclear attack because he let Iran go nuclear.

Plus, my guess is most of the voters that are generational welfare recipients (those people who know no working persons and have never known any working persons) would always vote Democrat because they have no interest in working ever if they can get $10,000′s of free stuff just for being an American. The problem is that is not an infinitely sustainable situation.

talkingpoints on February 18, 2014 at 10:23 PM

I see you are a big government tea partier. Didn’t even know they existed. Because only a big government tea partier would support government officials threatening a private business. Only a big government conservative would equate a union lobbying to get more members to join the union with politicians threatening a private business.

loveofcountry on February 18, 2014 at 10:19 PM

As is typical of you libtards, you have no clue.
I’m a MINIMAL government tea partier. And I’m extremely anti-union. So I have no problem with a right to work politician in a right to work state saying if the union threatens the workers into giving the union power, then they will lose state government support.
What you call “union lobbying” the workers themselves have called “threats”.
So stuff it fascist.

dentarthurdent on February 18, 2014 at 10:25 PM

If that is the case, tell us why the senator from Tennessee had to threaten the workers and company then? Tell us why he said he would make sure all their subsidies were gone if they unionized?

loveofcountry on February 18, 2014 at 10:01 PM

I didn’t check to see his party affiliation, but union dues go to political contributions, all of which go to the Democrat party. Maybe it’s time to stop allowing Unions to participate in elections or donate to candidates. I see absolutely no reason why my tax dollars, in the form of corporate subsidies, should go to elect poiticians whose positions I strongly oppose.

Also Obama did weigh in on the question in favor of the unions and has had the IRS harass individual citizens who oppose his positions. He makes Nixon look ethical.

talkingpoints on February 18, 2014 at 10:29 PM

Not in this country they don’t. Look at what happened in Tennessee. The big corporation owned senator over there threatened to take away all the subsidies the state was giving VW if the republican leaning workers dare vote in the UAW.

And the Big-Labor owned Obama came in and threw all of his weight into argument making the charge that everyone was in favor of the UAW representing Volkswagen except for local politicians who “are more concerned about German shareholders than American workers”.

And we heard nothing from the “right to work” libertarian pretenders.

What should they have said? I thought by your first sentence intervention was wrong.

I am still shocked the vote count for the UAW was that high. One would have expected those republican leaning workers to have rejected the union by at least 50%.

It was 53% to 46%. I believe the press called Obama’s 53% of the vote a landslide win.

The irony is most of them are for the German style work councils which basically tells you their opposition to the union was simply due to them being republicans.

loveofcountry on February 18, 2014 at 9:46 PM

What?

No, there’s another BIG reason you’re not stating.

The UAW’s political arm.

If it was a worker’s council as VW intended it to be, the union would have been about working with management to better working conditions and create better vehicles. Instead their money would have been used NOT to represent them, but push for political patronages that the workers neither wanted nor needed.

itsspideyman on February 18, 2014 at 10:30 PM

If that is the case, tell us why the senator from Tennessee had to threaten the workers and company then? Tell us why he said he would make sure all their subsidies were gone if they unionized?

loveofcountry on February 18, 2014 at 10:01 PM

First, he didn’t say that. He said that it would hamper future efforts to expand the plant, including incentives.

Second, he has the right to voice his opinion, and to speak it. Should he only have the right to say nice things about the UAW or not at all?

Face it, the UAW had nearly everything going for it at VW, with the exception of card check, and they couldn’t make the sale. Scapegoating the Senator won’t change that.

Jeff Weimer on February 18, 2014 at 10:35 PM

The irony is most of them are for the German style work councils which basically tells you their opposition to the union was simply due to them being republicans.

loveofcountry on February 18, 2014 at 9:46 PM

No, it’s because the union is the UAW.

Jeff Weimer on February 18, 2014 at 10:35 PM

So, how many leftarded sub-moronic trolls have loused up the joint so far?

Midas on February 18, 2014 at 10:43 PM

Most beneficiaries of a wage increase are the Democratic constituency. Most losers of the wage increase who find themselves out of minimum wage jobs are also their constituency.

Don’t have a horse in this race. Best to pull a Boehner this time and let them have their way.

FrankT on February 18, 2014 at 10:56 PM

The irony is most of them are for the German style work councils which basically tells you their opposition to the union was simply due to them being republicans.

loveofcountry on February 18, 2014 at 9:46 PM

What is this, some kind of “false consciousness” or “what’s the matter with Kansas” argument?

Cuz, you missed the obvious reason in order to rush to blame their *possible* political leanings.

Jeff Weimer on February 18, 2014 at 11:00 PM

So, how many leftarded sub-moronic trolls have loused up the joint so far?

Midas on February 18, 2014 at 10:43 PM

Well, they went from Repubs to Tea Party to finally trying to bring in the AUW failure in Tennessee and the threats imposed by Republicans on the workers who in their timidity and stupidity voted out the union, so yea, they stayed on the straight and narrow.

This comes with a sarc tag /s. :)

itsspideyman on February 18, 2014 at 11:02 PM

I am still shocked the vote count for the UAW was that high. One would have expected those republican leaning workers to have rejected the union by at least 50%.

You’re missing the point there too. The UAW had every advantage: VW invited them to come in, the UAW spent 2 YEARS and $5M promoting it. I’m surprised it wasn’t closer or even a done deal, Republicans or not.

Maybe if a different union, one with a reputation of stewardship, came in and organized; maybe they would be successful.

Jeff Weimer on February 18, 2014 at 11:06 PM

Of course lefties reject right to work. They want everyone paying homage to the unions.

dentarthurdent on February 18, 2014 at 10:07 PM

As long as the major unions continue to support Democrats, they’ll (Libs) be pro-union.

And Republican politicians will continue to be anti-union as long as they continue to support Democrats.

It’s all about the money. Neither party really cares all that much about either the workers nor the companies.

Dr. ZhivBlago on February 19, 2014 at 12:47 AM

Hear that giant sucking sounds? It’s wealth being transferred at the rate of $300 bil per year to China. You can whine about the poor and cut a billion here and billion there from social safety net programs, but it’s nothing more than rounding error when you consider the size of US trade deficits.

bayam on February 18, 2014 at 8:07 PM

Yeah, and your buddy Slick Willy Clinton was a big part of that:

http://underheelofliberalism.wordpress.com/2012/12/23/how-china-conquered-america-the-real-bill-clinton-scandal/

But, to be fair, it was both parties in the long run, probably starting with Nixon.

Also, to be fair, doing these trade agreements (though they suck for most of us) are about increasing the bottom line of U.S. corporations-ultimately, that’s what it’s all about-making money-not seeing to the welfare of the country even if it means making less money, and certainly there’s no social contract that says companies have to provide folks with jobs.

Capitalism is a two-edged sword.

Just the way it is. And there’s not a damn thing to do about it.

Who’s going to engage in protectionism in D.C.? Republicans, especially the conservative ones would see that as some kind of Socialism. At any rate, too many of these people were bought and paid for long ago, and any rogue wishing to try to renege on these trade agreements will be hung out to dry.

And forcing companies to “come back” is also Socialism…plus, they would just as soon shut down and parachute out as do that anyway.

Dr. ZhivBlago on February 19, 2014 at 1:00 AM

Who here has actually lived on a minimum wage salary?
Anybody who hasn’t should be barred from claiming that the minimum wage is big enough already

BubbaHoTep on February 19, 2014 at 4:27 AM

If a free and independent adult is foolish enough to take a job without benefits for less than $10/hr they are complete dunces.
Yes there are $8/hr jobs out there, but, those jobs do not require much thought and even less skill.
The Stop & Go sign flipper is the most glaring example … $5 tops!
Even if I offered someone a job at $7.25/hr, which really comes up to (or slightly over) $10/hour, I did not force the applicant to say yes. And I am not responsible for that persons circumstances, nor am I responsible for their life choices. The fact is, most employers would love to do away with unskilled laborers as they are typically the least reliable part of the work force.
In the past these low wage positions were part time, first time jobs offered to young people.
I cannot remember the last time we had an applicant (16 to 21) who came in for a summer job.
Evidently, some adults still can not qualify for jobs that were once meant as an introduction to the work force.

kregg on February 19, 2014 at 7:20 AM

Who here has actually lived on a minimum wage salary?
Anybody who hasn’t should be barred from claiming that the minimum wage is big enough already

BubbaHoTep on February 19, 2014 at 4:27 AM

So question, why can’t we just raise it to $100.00 an hour.. I mean if the minimum wage doesn’t effect anyone.

BTW, I make under the “new” minimum wage, and will probably lose my job if this goes through.

melle1228 on February 19, 2014 at 8:13 AM

Who here has actually lived on a minimum wage salary?
Anybody who hasn’t should be barred from claiming that the minimum wage is big enough already

BubbaHoTep on February 19, 2014 at 4:27 AM

I have.

Therefore I can claim that the current minimum wage is big enough already.

Thanks.

bigmacdaddy on February 19, 2014 at 8:49 AM

As my fifteen year old has said for the past two years: Minimum education = minimum wage.

stuartm80127 on February 19, 2014 at 8:55 AM

Who here has actually lived on a minimum wage salary?
Anybody who hasn’t should be barred from claiming that the minimum wage is big enough already

BubbaHoTep on February 19, 2014 at 4:27 AM

I’ve lived on minimum wage when I was between jobs, making 7.00/hr. It was 30 hours a week and I managed.

Now, have you lived on minimum wage?

itsspideyman on February 19, 2014 at 9:23 AM

Obama’s Legacy:
1. Continued Constitutional & Lwgal Violations
2. Record-setting deficit-spending & Record-setting Deficit
3. 1st President to ever affect a U.S. Credit Rating Down-grade
3. Aided/abetted Terrorists
4. Record number of Americans on Food Stamps, Welfare
5. Record number of Americans no longer in workforce
6. Policies / ‘edicts’ caused MILLIONS of Americans to lose their health care plans & JOBS
7 Deaths of Americans (Benghazi, Fast-&-Furious, Ft. Hood…)
8 Scandals (F&F, Benghazi, IRS, NSA, etc…)

EVERYTHING he has touched has HURT Americans! So what’s a half a million more Americans losing their jobs? “These Americans should THANK me for giving them time off…” Good grief!

easyt65 on February 19, 2014 at 10:12 AM

Raising the minimum wage is not about economics or helping the poor. It is about redistribution and moving forward on the idea of a federally mandated guaranteed wage under the guise of fairness (think Trumka). Nothing more nothing less; anytime the government allocates resources/wealth/income ; you end up with less, thus raising the minimum wage is not based on sound economic principles.

Only about 11% of the folks under 300% of the poverty line will be affected with an increase of the minimum wage. Raising the minimum wage makes about as much sense as raising capital gain taxes. Note….I did not mention raising the marginal tax rate as that is another topic for discussion. Liberals in power know this and it is useless to argue over the economic issue with them.

HonestLib on February 19, 2014 at 10:59 AM

Who here has actually lived on a minimum wage salary?
Anybody who hasn’t should be barred from claiming that the minimum wage is big enough already

BubbaHoTep on February 19, 2014 at 4:27 AM

Define “lived on a minimum wage”. As in supporting a family?
No. I’ve earned minimum wage – but the last time I actually earned minimum wage was when I was in high school and still living with my parents. And that only lasted a few months before I got a promotion and a pay raise (McDonald’s burger flipper). And I’ve never been at minimum since.
Even my youngest son (21) who didn’t go to college and works in restaurants hasn’t been at minimum wage since his first high school job – and he makes enough that he just bought his first house. And every part-time job my older son got while in college was above minimum – typically about $10/hour.

Your problem, as with all the libtards pushing this increase, is that you even think anyone should be living on or supporting a family on minimum wage. Minimum wage shouldn’t exist at all in my view, but as it does, it is entry level . You’re not supposed to stay there. But it’s YOUR responsibility to make yourself worth more.

dentarthurdent on February 19, 2014 at 11:40 AM

I don’t see this as much more than a classic “robbing Peter to pay Paul” scheme. Am I wrong? If so, how?

RI_Red on February 19, 2014 at 2:26 PM

<blockquoteYour problem, as with all the libtards pushing this increase, is that you even think anyone should be living on or supporting a family on minimum wage. Minimum wage shouldn’t exist at all in my view, but as it does, it is entry level . You’re not supposed to stay there. But it’s YOUR responsibility to make yourself worth more.

This, as well…I was, and have never been, under the impression minimum wage was anything more than an entry level wage designed to “get you started”. Past that, you’ve got to earn your way up the ladder.

RI_Red on February 19, 2014 at 2:28 PM

A loss of 500k .gov subsidized jobs, increased wages for 16.5 million people, 900k out of poverty.

Perhaps some price increase. Of course, the wizards of business know when prices rise, profit falls. So therefore despite the threats of 3000% price increases, that will not come to pass. Instead it will force business owners to update their business plans. Or face extinction. Are you willing to keep an outdated business model in operation by keeping wages low, efficiency low, and also pay taxes to keep these employees on the dole?

Unlike many say here, working low wage jobs does not form the start in a ladder to wealth anymore. When I was in banking, HR would tell me how those who worked in call centers for maybe $12-$15 per hour were essentially blacklisted. Never to rise up and go elsewhere. Horribly unfair.

According to many I talk to, minimum wage job experience provides nearly zero incentive to hire an applicant.

antisense on February 19, 2014 at 2:45 PM

A loss of 500k .gov subsidized jobs, increased wages for 16.5 million people, 900k out of poverty.

Perhaps some price increase. Of course, the wizards of business know when prices rise, profit falls. So therefore despite the threats of 3000% price increases, that will not come to pass. Instead it will force business owners to update their business plans. Or face extinction. Are you willing to keep an outdated business model in operation by keeping wages low, efficiency low, and also pay taxes to keep these employees on the dole?

Unlike many say here, working low wage jobs does not form the start in a ladder to wealth anymore. When I was in banking, HR would tell me how those who worked in call centers for maybe $12-$15 per hour were essentially blacklisted. Never to rise up and go elsewhere. Horribly unfair.

According to many I talk to, minimum wage job experience provides nearly zero incentive to hire an applicant.

antisense on February 19, 2014 at 2:45 PM

So logically, anyone working on minimum wage goes nowhere? I’m sorry, but I worked at minimum wage and didn’t stay there. So do many others.

Also, how does raising the minimum wage fix this?

itsspideyman on February 19, 2014 at 2:49 PM

So logically, anyone working on minimum wage goes nowhere? I’m sorry, but I worked at minimum wage and didn’t stay there. So do many others.

Also, how does raising the minimum wage fix this?

itsspideyman on February 19, 2014 at 2:49 PM

I am not saying they do not go anywhere that pays well. Its just some anecdotal evidence that skills are more important than experience. These skills can be hard to develop when working a job that provides nothing more than a paycheck.

The person on minimum wage or low wage has most of their income destroyed via inflation, and there is little hope of making more unless they move jobs. Hard to move jobs if zero skills are gained from said employment.

I see a minimum wage increase as an artificial way to bust up stale business plans and introduce liquidity into the market. Plus, if these employees are of so low value to the employer that they are willing to invest nothing in them, then perhaps the employees time is best spent elsewhere.

antisense on February 19, 2014 at 2:58 PM

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