Quickly after the nonpartisan Congressional Budget Office reported Tuesday that an estimated 500 thousand jobs (with a chance of up to 1 million) would be lost if lawmakers met Obama’s demand for the increase of the federal minimum wage, the administration cranked into full spin mode. As they did for the CBO’s report on the 2.5 million job toll of Obamacare, Jay Carney et al ignored the damage done to employment and emphasized the increased financial benefits of a $10.10 minimum wage.
The CBO’s report clearly damaged the president’s most recent campaign, laying out a potentially grim picture of the wage hike’s impact on jobs estimated at 500 thousand jobs, but possibly being twice the number, up to 1 million, or in a best case scenario, slightly less:
Effects of the $10.10 Option on Employment and Income
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 (see the table below). 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 White House hurriedly cranked into damage control mode, Jay Carney ignoring the jobs numbers and instead emphasizing the overall increase in earnings.
Carney is referring to the part of the CBO report that predicts a $31 billion increase in earnings for 16.5 million low-wage workers:
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.
Combined with the CBO's estimated 2.5 million jobs to be lost to Obamacare, two of the administration's high-profile initiatives could result in the net loss of 3 million jobs.