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Feb 20, 2014 02:00 am | W. James Antle III
In
its analysis of President Obama’s proposed minimum wage increase, the
Congressional Budget Office made a startling revelation: the nonpartisan
number-crunchers confirmed the basics of Econ 101.Raising the price of something, in this case unskilled labor, will decrease demand for it. So raising the federal minimum wage to $10.10 an hour is likely to cost 500,000 jobs, the CBO concluded.
And it’s possible, they say, that job losses due to the minimum wage hike could reach as high as one million, at a time when many are struggling to find work and even dropping out of the labor force entirely out of frustration.
Econ 101 did not go over well at 1600 Pennsylvania Avenue. “Our review is that zero is a perfectly reasonable estimate of the impact of the minimum wage on employment,” Jason Furman, chair of the White House Council of Economic Advisers, told reporters.
Furman was part of the Obama administration’s pushback against the CBO analysis, which is normally infallible when projecting things like Obamacare-induced deficit reduction, but he didn’t lay it on too thick. “Sometimes you have to have respectful disagreement between economists,” he said, adding, “I don’t think this is the CEA vs. CBO.”
read morehttp://server1.nationalinterest.org/commentary/obamas-war-economics-9905
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