Following up on Collin’s article “$15 Minimum Wage.. It’s Happening Now”, the CBO has recently released it’s report on the economic impact of raising the minimum wage to $10.10 an hour. A New York Times Economix Blog article pulls a few nuggets from the report:
-An estimated 16.5 million low-wage workers will see their wages increase as a result of the minimum wage increase.
-900,000 people who are currently impoverished will move above the poverty threshold.
-Raising the minimum wage will reduce low-wage employment by roughly 500,000.
The article even questions the employment loss estimates as being too high, noting that the most precise estimates of employment loss due to minimum wage increases would indicate a much lower loss of employment.
At any rate, even if we take these numbers at their face value, a benefit for 16.5 million workers seems to far outweigh the loss of 500,000 jobs. Even the number of people it will pull out of poverty almost doubles the predicted employment loss. And this doesn’t even consider the money the government will save on public assistance programs for the working poor. It will be interesting to see how the White House and Congress react to these numbers. As of now the prospect of a federal minimum wage increase seems promising, economically at least.
Somewhat related – Mark Thoma shares an article from Heidi Moore comparing this estimated job loss (as a result of a proposed minimum wage hike) to the estimated job loss (of ~2 million jobs) from federal budget cuts or austerity measures. One piece of the quote: “Budget cuts, also known as austerity, are the most damaging economic decision Congress has made since the financial crisis. Former Federal Reserve chairman Ben Bernanke warned lawmakers several times that austerity measures would hurt the economy, but they largely ignored his warnings. Jobs lost to government budget cuts are part of the reason why the economy still looks so weak…”
Link here: http://economistsview.typepad.com/economistsview/2014/02/forget-the-minimum-wage-job-losses-its-government-cuts-thatll-getyou-mad.html