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.
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