White House Slams CBO's Wage Report
Despite the many times the White House has pointed to the CBO as proof that Obama's policies are working, the administration pushed back against this week’s report that claimed that a hike in the minimum wage would kill jobs.
On February 18, the Congressional Budget Office (CBO) put out a report finding that if the minimum wage were raised to $10.10 per hour some 500,000 jobs would be lost as employers scramble to save money and keep prices of products and services from impacting customers.
"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," the report states. The report goes on to say that it may even rise to as many as 1.0 million jobs could be lost.
Worse, the CBO found that even as the wage hike would bring about $31 billion to low wage workers, only 19 percent of that would go to families at or below the poverty threshold.
"Moreover," the CBO said, "the increased earnings for some workers would be accompanied by reductions in real (inflation-adjusted) income for the people who became jobless because of the minimum-wage increase, for business owners, and for consumers facing higher prices."
The White House was not pleased with this report at all. Jason Furman, the chairman of the White House's Council of Economic Advisers, said the CBO's report is off base.
"CBO’s estimates of the impact of raising the minimum wage on employment does not reflect the current consensus view of economists," he said in a blog post on WhiteHouse.gov. "The bulk of academic studies, have concluded that the effects on employment of minimum wage increases in the range now under consideration are likely to be small to nonexistent."
Obama's supporters in Big Labor also slammed the CBO. Richard Trumka, chief of the AFL-CIO, turned the non-partisan CBO report into an attack on "conservative ideologues."
"Every time momentum builds for lifting wages, conservative ideologues say it will cost jobs. Every time, they've been dead wrong," Trumka said in a statement reported in The Wall Street Journal.
"This is more of the same noise," Trumka said. He then claimed that "conservative economists" don’t care about workers. "Our country is finally poised to lift millions out of poverty and make our country work for the people who work. Let’s raise the wage and we’ll prove the CBO wrong again."
But Obama hasn't always been so sour on reports from the CBO. Last June, the White House was excited to use a CBO report that the administration said supported its position on immigration.
The White House even happily spun the recent CBO report that said up to 2.5 million Americans would lose their jobs due to Obamacare. In that case, the administration claimed that Obama's policies were bringing "freedom" to workers "stuck" in jobs because of healthcare.