[jj2424]

Raising the U.S. federal minimum wage to $10.10 an hour, as President Barack Obama and Democrats in Congress are proposing, could result in about 500,000 jobs being lost by late 2016, the Congressional Budget Office (CBO) estimated on Tuesday.

The non-partisan CBO also said that increasing the hourly wage could reduce U.S. budget deficits by a small amount for several years, but then increase them slightly in later years.

The current federal minimum wage in the U.S. is $7.25 an hour.

Democrats who control the U.S. Senate could try to advance minimum wage legislation as early as next month.

The CBO report, which also looked at the impact of raising the minimum wage to $9 an hour instead of $10.10, said either step would lift many out of poverty.

A $10.10 minimum wage would bring 900,000 people above the poverty threshold of $24,100 a year for a family of four. That figure would be 300,000 people with a $9 minimum wage, CBO said.

Families in poverty would see a total $5 billion increase in real income at $10.10 and $1 billion under a $9 wage, CBO estimated.

Altogether, 16.5 million workers would see their earnings rise with a $10.10 wage, while 7.6 million would benefit with a $9 wage, according to the CBO report.






http://www.cbc.ca/news/business/u-s-min ... -1.2542202

[andyt]

Insteresting. Here's the whole story:

$1:

WASHINGTON — A popular Democratic proposal to raise the minimum wage to $10.10 an hour, championed by President Obama, might reduce total employment by 500,000 workers by the second half of 2016. But it would also lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week.

That is the conclusion of a detailed assessment of how raising the minimum wage would affect incomes, employment and the federal budget. The report was released Tuesday by the nonpartisan Congressional Budget Office.

The complicated, nuanced analysis provides fuel for both supporters and critics of the policy, which would affect millions of low-wage workers and businesses — showing it might lead to fewer jobs, but also higher incomes.

Republicans said the report demonstrated the damage that raising the minimum wage in a weak economy could do.


“This report confirms what we’ve long known,” said Brendan Buck, a spokesman for House Speaker John A. Boehner of Ohio. “While helping some, mandating higher wages has real costs, including fewer people working. With unemployment Americans’ top concern, our focus should be creating — not destroying — jobs for those who need them most.”

But Democrats stressed that the proposal would lift millions of families out of poverty. Some also criticized the budget office’s employment analysis, with Representative George Miller, a California Democrat, calling it “outdated.”

“The C.B.O. made it absolutely clear: raising the minimum wage would lift almost one million Americans out of poverty, increase the pay of low-income workers by $31 billion and help build an economy that works for everyone,” said Representative Nancy Pelosi of California, the minority leader.

The budget office found that lifting the federal minimum wage, currently $7.25 an hour, would have a complicated effect on the labor market, acting as both a boon and a burden for businesses and workers.

Over all, the budget office estimated that lifting the minimum wage to $10.10 and indexing it to inflation would reduce total employment by about 0.3 percent, or 500,000 workers. But it cautioned that its estimate was imprecise, with the job losses likely to fall in a range from scant to one million.

The proposal would result in winners and losers among the low-wage workers it would focus on, the report found. Some low-wage workers would fail to find a job because of a higher minimum wage, for instance. Thus, some families would see their earnings fall sharply.

But increasing the minimum wage would bolster the earnings of about 16.5 million workers: $5 billion a year more for families living in poverty, $12 billion a year more for families earning from one to three times the poverty threshold.

The budget office analyzed two proposals in its report. The first would increase the minimum wage to $10.10 by mid-2016 and would tie it to the Consumer Price Index, so that it would increase with inflation over time. It would also increase the minimum wage for tipped workers.

The second proposal would increase the minimum wage to $9, without any indexing for inflation. That would have much smaller effects, the budget office found. It would reduce employment by 100,000 workers by the second half of 2016, and push about 300,000 people above the poverty line.

The higher minimum wage would reduce employment in two main ways, the budget office report said. Businesses facing higher labor costs would raise prices, passing those higher costs on to their customers. That would lead their customers to cut back on their purchases, meaning that businesses would need fewer workers.

Raising the minimum wage would also make hiring low-wage workers more expensive relative to other investments, like new machinery. Businesses might then reduce their use of low-wage workers and shift their spending toward other things, like automated systems.

But a higher minimum wage would also leave millions of families with more cash to spend, helping bolster demand throughout the economy.

http://www.nytimes.com/2014/02/19/busin ... .html?_r=0

[Jabberwalker]

So, if they LOWER the minimum wage, will that create jobs?

Maybe, I suppose.

[andyt]

If you make the minimum wage negative, force people off welfare to take those negative wage jobs, you could have everybody in the country working.

Note that they're not sure of the effect - could be no job losses, could be a million jobs. But otoh, it's a no brainer that raising the min wage will lift many people out of poverty. That money would be recycled immediately into the economy, since low wage earners don't have the luxury of sitting on their money. And it would reduce the amount of subsidy the govt pays to low wage earners with programs like food stamps, saving the govt money. It would also increase tax revenues from those wages, and low wage earners can't hide their earnings the way the rich do. So, a stimulus to the economy and less drain on the govt coffers - might not result in any job losses at all.

What they would need to do tho, is make sure the jobs don't go to illegals. Unfortunately the very people who are for min wage also aren't willing to crack down on the illegals.

[Centre]

Jabberwalker Jabberwalker:

So, if they LOWER the minimum wage, will that create jobs?

Maybe, I suppose.

Well they could lower it and have everybody working.

Think clothing and Bangladesh. If the USA could get the people to work for less than $38.00 a month, the jobs would flood back.....

[Jabberwalker]

If the U.S. dollar weren't so overvalued, they would be able to sell their goods overseas, again. Their currency value is set for import and consumption, not export. A higher dollar hurts middle America .... helps us in Ontario, though.

[Centre]

The owner of Gap, Old Navy, Banana Republic, Athleta, Piperlime and Intermix, said it will raise the current $7.25 minimum wage for its workers to $9 this year and to $10 in 2015.




The company, which employs more than 65,000 people in the U.S., will raise the minimum rate to $9 in June 2014 and $10 in June 2015. It’s currently $7.25 an hour, though Gap says most of its employees make more than that . The decision is significant — Gap is America’s biggest specialty retailer, with more than 2,000 namesake, Old Navy, Banana Republic, Piperlime, Athleta and Intermix stores domestically.





Art Peck, president of growth, innovation and digital for Gap Inc., said in a telephone interview with BuzzFeed. “It’s coinciding with the national debate, but honestly, this was a business decision. I characterize it internally as a win-win-win-win. We usually look for a win-win, but this is a quad-win,” he said, listing shareholders, associates, customers and the communities that Gap does business in as beneficiaries. He added that Gap has no plans to cut jobs as it boosts wages.


http://www.buzzfeed.com/sapna/gap-raisi ... ployees-to