President Obama has proposed raising the federal minimum wage from $7.25 per hour to $10.10 per hour by 2016. The Democrats are aligned with their President, and a wide majority of the American public also wants to raise the minimum wage. Republicans are against it. House Republicans unanimously voted down an amendment to raise the minimum wage to $10.10 last year.
Enter the Congressional Budget Office (CBO), which estimated the following effects from a minimum wage hike to $10.10. This is from the L.A. Times:
1. Wages would rise for 16.5 million workers.
2. Income for families living below the poverty line would rise by a combined $5 billion, and by $12 billion for those earning less than three times the poverty level.
3. About 900,000 people would be moved out of poverty.
4. The raise would reduce total employment by about 500,000 workers.
To clarify, the CBO actually said jobs would be reduced somewhere between very little and a million. 500,000 is it's middle estimate.
There would be job winners and job losers with the President's proposal. The White House is attempting to downplay the losers, while the Republicans are attempting to play up the losers by saying the last thing we need right now is more job losses. I imagine the White House isn't very fond of the CBO these days. This month alone, the CBO has estimated that Obama's policies will cause 3 million job losses (between Obamacare and the minimum wage). That's not good news for the President when the latest Gallup poll shows that the biggest concern of Americans is jobs, and number two is the economy in general.
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