Tuesday, February 18, 2014

CBO: Obama's proposed minimum wage increase would lead to even more joblessness

According to a new report released by the Congressional Budget Office on Tuesday, President Obama's proposed minimum wage increase would lead to more joblessness and put hundreds of thousands of Americans out of work.

The President has proposed raising the minimum wage from the current hourly wage of $7.25 to $10.10 an hour by the year 2016.

However, according to the CBO report, a $9 increase in the minimum wage would eliminate 100,000 jobs and a $10.10 increase would eliminate 500,000 jobs as employers would ultimately reduce their workforce to make up for the higher wages.

500,000 jobs would be lost, while only 900,000 Americans, out of the 45 million projected to be living in poverty in 2016, would rise above the poverty level, the CBO noted.

Roughly 3.6 million Americans were paid $7.25 an hour or less in 2012, representing 4.7% of hourly workers, the Wall Street Journal noted.

Additionally, the CBO report said that a minimum wage increase would force businesses to raise their prices, which, in turn, would force consumers to cut back on their purchases, which would mean businesses - manufacturers, retail outlets etc. - would need less workers.

The Wall Street Journal noted that, according to the CBO report, just 19% of the increased wages would go to Americans living below the poverty threshold, while close to 30% of the increased wages would go to people living in families that earned more than three times the poverty level, as many minimum-wage workers are second earners and teenage children living in middle- or upper-income households.

And, of course, as I noted earlier, a minimum wage increase would result in higher prices for consumers.

But of course none of this matters to the President - the master pol and the campaigner par excellence - whose sole focus is to cast the seductive bait and to reel in the gullible fish by fine tuning his phony talking points and polishing his crafty sound bites.

The Wall Street Journal noted that, "The [CBO] report could blunt the political momentum Democrats had hoped the issue would give them in November's midterm elections."

But, no need to worry; leave it to Obama - the master pol and Campaigner-in Chief - to use the phony bait to his advantage.

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