employment

CBO: Minimum wage hike would cost 500,000 jobs

An ever-increasing federal minimum wage is a statist panacea. Even Mitt Romney supported tying it to inflation in the 2012 campaign. But the CBO on Tuesday released its report scoring the proposals, and the numbers aren’t good.

If the minimum wage were raised on $10.10, as the Obama administration has proposed, somewhere between 500,000 and 1 million jobs could be lost over the next two years:

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. 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 worker

Economists and politicians have debated for decades about the minimum wage’s effect on employment, but the non-partisan government calculator has spit out a decisively negative result, at least for employment.

cbo1

Adding more salt to the wound, the CBO finds that raising the minimum wage also won’t be the immediate fix for poverty that many thing it would:

The increased earnings for low-wage workers

Guess who else is against the minimum wage?

minimum wage

Read these paragraphs and see if you can figure out who wrote them:

The Federal minimum wage has been frozen at $3.35 an hour for six years. In some states, it now compares unfavorably even with welfare benefits available without working. It’s no wonder then that Edward Kennedy, the new chairman of the Senate Labor Committee, is being pressed by organized labor to battle for an increase.

No wonder, but still a mistake. Anyone working in America surely deserves a better living standard than can be managed on $3.35 an hour. But there’s a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market. A far better way to help them would be to subsidize their wages or - better yet - help them acquire the skills needed to earn more on their own.

An increase in the minimum wage to, say, $4.35 would restore the purchasing power of bottom-tier wages. It would also permit a minimum-wage breadwinner to earn almost enough to keep a family of three above the official poverty line. There are catches, however. It would increase employers’ incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.

[…]

The idea of using a minimum wage to overcome poverty is old, honorable - and fundamentally flawed. It’s time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little.

Guess? Guess? Hmm? Give up? All right then, the individual who wrote this was…

San Francisco’s big government nannies become first to micro-manage worker schedules

San Francisco Mall

Just when you thought big government nannies couldn’t interfere anymore in the employer-employee relationship, think again: San Francisco has become the first-in-the-nation jurisdiction to require chain stores with 20 or more locations worldwide and 20 or more employees within the city to give two weeks notice for any employee schedule changes or pay a “predictability pay” premium to the employee whose schedule is altered with less notice.

This is a particularly curious regulation, especially during the height of the holiday season when retailers must accommodate part-time employee schedules and an increase in customer traffic.

POLITICO has the report:

“We know that while the economy is doing well for some, there are too many workers and families struggling in low-wage jobs with unpredictable shifts,” said Supervisor David Chiu, who in September introduced the predictable scheduling measure as part of a “Retail Workers Bill of Rights.” In addition to limiting schedule changes, the bill requires employers to pay part-time employees the same starting hourly wage as full-time employees in the same position. Employers must also give part-time employees the same access to time off enjoyed by full-time workers, and equal eligibility for promotion.

Remy: Working 9-to-5

See Video

In his latest video for ReasonTV, Remy raps about how Obamacare discourages some Americans from working full-time, resulting in 2.5 million job losses by 2024, according to the Congressional Budget Office.

CBO director defends minimum wage report against White House attacks

Doug Elmendorf

The White House didn’t take too kindly to the nonpartisan Congressional Budget Office’s report showing that the $10.10 minimum wage being pushed by President Barack Obama would lead to the loss of 500,000 jobs.

In response to the report, two White House economists wrote a lengthy rebuttal to the report, touting the findings that they felt bolstered the case for a minimum wage hike while, at the same time, dismissing its findings on the negative impact to the labor market. Call it a case study in “having their cake and eating it too.”

Betsey Stevenson, one of the White House economists who wrote the rebuttal, even insulted the CBO, comparing its report to what’s taught in introductory economics.

“[A] new burgeoning literature has really pointed out that how much you pay people actually affects how they perform, what they do, and how much they produce,” Stevenson told reporters on Tuesday. “You don’t get the loss of employment that that, you know, supply-demand that you saw on the chalk board if you took introductory economics would have demonstrated.”

CBO Director Doug Elmendorf defended his agency’s report on the labor market effects of the minimum wage at a breakfast hosted by the Christian Science Monitor on Wednesday:

Yes, Secretary Sebelius, Obamacare will reduce employment

While most Democrats seem to be hailing the news that Obamacare will reduce the incentive to work, Health and Human Service Secretary Kathleen Sebelius seems to be in complete denial.

At a stop in Orlando on Monday, Sebelius told reports that there is no evidence that Obamacare will reduce employment.

“There is absolutely no evidence, and every economist will tell you this, that there is any job-loss related to the Affordable Care Act,” Sebelius said. “Part-time physicians are actually down since 2010, not up. The number of full-time workers continues to increase. I know that’s a popular myth that continues to be repeated, but it just is not accurate.”

Well, there is evidence.

The Congressional Budget Office recently determined that Obamacare would reduce employment by 2 million full-time workers by 2017, up from an earlier projection of 800,000, rising to 2.5 million by 2024. The reason for the decline in workers is because the subsidies, which are tied to income, would encourage people to work less.

Obamacare, minimum wage hike could reduce employment by up to 3 million workers by 2017

The net-effect of Obamacare and President Barack Obama’s proposed minimum wage hike could mean 3.5 million fewer workers by 2017, according to recent reports from the nonpartisan Congressional Budget Office (CBO).

Earlier this month the CBO released its annual snapshot of the economy, The Budget and Economic Outlook: 2014 to 2024. The nonpartisan fiscal research arm of Congress determined that Obamacare would reduce employment by 2 million workers by 2017.

“ACA will cause a reduction of roughly 1 percent in aggregate labor compensation over the 2017-2024 period, compared with what it would have been otherwise,” noted the CBO (p. 123). “The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.”

The reason for the for the reduction is the subsidies available to help pay for health insurance coverage create a disincentive to work. The subsidies are, of course, tied to Americans’ income, the less someone earns, the greater the subsidy.

The reduction of workers wouldn’t end with Obamacare, at least if President Obama has his way. The CBO released a report yesterday, The Effects of a Minimum-Wage Increase on Employment and Family Income, in which it projected that the $10.10 minimum wage proposal currently being pushed by the White House and congressional Democrats could reduce employment from anywhere between 500,000 to 1 million workers.

Federal Reserve report: Obamacare’s negative impact on employment

In mid-January, the Federal Reserve released its monthly Beige Book, which offers a wide-ranging look at commentary on economic conditions in each of the central bank’s 12 regions. While it’s mostly mundane, the Heritage Foundation found some key details buried in the report that relate to Obamacare and its affect on employment:

The Beige Book finds businesses repeatedly stating that Obamacare and rising health care costs have held back the labor market:

Obama’s minimum wage hike could kill 1 million jobs

No matter how many times President Obama says we’re in a recovery, we just don’t have a lot to make us really feel like we’re rebounding from the world economy since the Great Depression.  Recent unemployment numbers were less than expected, with a staggering number of Americans who just pulled themselves out of the job market entirely.  It just doesn’t feel like an economy on the rebound, does it.

In a down economy, combating poverty always seems to become a priority.  President Obama’s answer seems to be not just extending unemployment benefits — a measure that Republicans don’t actually oppose, they just want to identify cuts to pay for the extension — but also raising the minimum wage.

Of course, that’s not a problem if you don’t mind killing around 1 million jobs in the process:

The Obama administration’s proposal to raise the minimum wage to $10.10 an hour could result in as many 1,084,000 jobs eliminated from the work force, according to a new study conducted by the Employment Policies Institute (EPI)

Democrats, Big Labor plan state-based minimum wage initiatives in 2014

Well, this is entirely unsurprising. With Obamacare looking like a political liability for Democrats in the 2014 mid-term election, the White House and its Leftist allies are looking to launch initiatives to raise the minimum wage in states where vulnerable incumbents face tough bids for re-election:

Democratic Party leaders, bruised by months of attacks on the new health care program, have found an issue they believe can lift their fortunes both locally and nationally in 2014: an increase in the minimum wage.

The effort to take advantage of growing populism among voters in both parties is being coordinated by officials from the White House, labor unions and liberal advocacy groups.
[…]
“It puts Republicans on the wrong side of an important value issue when it comes to fairness,” said Dan Pfeiffer, the president’s senior adviser. “You can make a very strong case that this will be a helpful issue for Democrats in 2014. But the goal here is to actually get it done. That’s why the president put it on the agenda.”
[…]
At the same time, Democratic campaign officials and liberal activists — conceding that Democrats face tough prospects in some Senate races — are working to put minimum-wage increases on the ballot next year in places like Arkansas, Alaska and South Dakota. The hope is to stoke Democratic turnout in conservative-leaning states where the party’s Senate candidates have been put on the defensive by the mishandled rollout of the Affordable Care Act.


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