Saturday, February 22, 2014

147.9 - CBO report on minimum wage: Where did those job figures come from?

CBO report on minimum wage: Where did those job figures come from?

Speaking of a different sort of outrage, you may have heard that the Congressional Budget Office has released its report on the effect of raising the minimum wage to $10.10 an hour.

And what they say was, well, this could life 900,000 people out of poverty, increase the living standards of several million people, but, the CBO said, it would also cost 500,000 jobs. And of course the right wing has jumped on this immediately: "We told you raising the minimum wage would cost jobs!" [sneer]

The thing is, how did they get this? No one seems to know how the Congressional Budget Office arrived at this figure. What they actually said in the report was that the effect of jobs could be anywhere from "negligible" to costing a million jobs. So apparently they just grabbed some off-the-shelf figures and picked the number in the middle without any regard to how likely any of the alternatives are.

The fact is, the last six times we have raised the minimum wage it no discernible effect on employment. The most recent comprehensive study shows no impact on employment, which is in fact the consensus view among economists, as attested to by a letter on the issue signed by over 600 economists.

Despite that, the Congressional Budget Office is saying "oh, we dunno, half a million jobs. Whatever." I have no idea where they got this. I do know how it's going to be used by the right wing to favor corporations and demean the poor.


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