The CBO released a study today that obliterated the Republican argument against raising the minimum wage. Republicans retaliated by trying to distort the report, but they can’t explain away the bad news for the GOP.
Republicans have pounced on the CBO estimate that raising the minimum wage to $10.10 an hour would cost 500,000 jobs, but this is what the CBO actually wrote in their report, “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. 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 CBO’s conclusion on employment is that their could be a negative effect, or a zero effect. The CBO report is not a definitive statement that raising the minimum wage will kill jobs. In fact, the research on unemployment as summarized by seven Nobel Prize winners and 600 economists found that moving to $10.10 an hour will have little or no impact on employment.
The CBO also found that increasing the minimum wage will help the middle class and working poor:
Many more low-wage workers would see an increase in their earnings. Of those workers who will earn up to $10.10 under current law, most—about 16.5 million, according to CBO’s estimates—would have higher earnings during an average week in the second half of 2016 if the $10.10 option was implemented. Some of the people earning slightly more than $10.10 would also have higher earnings under that option, for reasons discussed below. Further, a few higher-wage workers would owe their jobs and increased earnings to the heightened demand for goods and services that would result from the minimum-wage increase.
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.
Republicans have argued that most minimum wage workers are teenagers, but the CBO found that only 12% of those earning the minimum wage are teens. Republicans argue that increasing the minimum won’t lift people out of poverty, but the CBO concluded that increasing the minimum wage to $10.10 would lift 900,000 people out of poverty.
Conservatives and their media have attached themselves to that 500K job loss number, but what they are trying to do is cover up the fact that the CBO report devastates their argument against raising the minimum wage.
An increase in the minimum wage would lift nearly a million people out of poverty and benefit the middle class. The increase would also boost consumer demand, and reduce the deficit. Republicans have their minimum wage job killing talking point, but an examination of the full CBO report reveals some very bad news for Republicans.
The minimum wage issue just took on a new dimension for Democrats. Raising the minimum wage is about helping the middle class, and if Republicans want to risk their seats by arguing against a policy that will benefit the middle class they are welcome to take on that challenge this November.
Republicans will be running themselves right out of office if they continue to insist on opposing an increase in the minimum wage.