CBO Defends Its Minimum-Wage Estimate as Democrats Fume

The nonpartisan budget referee rejects White House criticism of a report that finds the minimum-wage hike would reduce the workforce.

National Journal
Catherine Hollander
Add to Briefcase
Catherine Hollander
Feb. 19, 2014, 7:08 a.m.

White House pique not­with­stand­ing, the Con­gres­sion­al Budget Of­fice is stand­ing by its es­tim­ate of the job im­pact that a min­im­um-wage hike would cre­ate.

“Our ana­lys­is of the ef­fects of an in­crease in the min­im­um wage is com­pletely con­sist­ent with the latest think­ing in the eco­nom­ics pro­fes­sion,” said CBO Dir­ect­or Douglas El­men­d­orf, dis­put­ing the Obama ad­min­is­tra­tion’s at­temp­ted take­down of his agency’s work.

The White House and con­gres­sion­al Demo­crats tried to paint CBO as out of touch with main­stream eco­nom­ic think­ing after the non­par­tis­an budget agency es­tim­ated rais­ing the min­im­um wage to $10.10 an hour could re­duce the num­ber of work­ers in the labor force by 500,000 in 2016. (It also found that the wage pro­pos­al would lift 900,000 people out of poverty in the same year.) Re­pub­lic­ans seized on the news of job losses as evid­ence a high­er min­im­um wage is bad policy.

El­men­d­orf ar­gued that it’s a little hard to com­pare CBO’s find­ings, which covered both an in­crease in the fed­er­al min­im­um to $10.10 and to $9 from the cur­rent level of $7.25, with oth­er eco­nom­ists’ as­ser­tions on the job im­pact of the min­im­um wage be­cause the lat­ter didn’t ne­ces­sar­ily have to quanti­fy their es­tim­ates. But, he said, CBO ap­pears to line up with what oth­er eco­nom­ists — who have spoken in qual­it­at­ive lan­guage — have found.

The budget-of­fice dir­ect­or poin­ted to a sur­vey of eco­nom­ists con­duc­ted last year by the Uni­versity of Chica­go Booth School of Busi­ness’s Ini­ti­at­ive on Glob­al Mar­kets, which found them about equally di­vided on the ques­tion of wheth­er a hike of the min­im­um wage to $9 would make it “no­tice­ably harder” for low-skilled work­ers to find jobs. “We don’t know ex­actly what the re­spond­ents to that sur­vey meant by ‘no­tice­ably harder,’ ” he said, but CBO’s es­tim­ate might track with that.

He also poin­ted to a let­ter, or­gan­ized by the lib­er­al Eco­nom­ic Policy In­sti­tute, signed by 600 eco­nom­ists in sup­port of rais­ing the min­im­um wage to $10.10. Some sig­nat­or­ies of that let­ter were among those cri­ti­ciz­ing CBO’s re­port Tues­day. But, El­men­d­orf said Wed­nes­day, “I’m not sure we would dis­agree with their state­ment of the evid­ence.” The let­ter said, “The weight of evid­ence now show[s] that in­creases in the min­im­um wage have had little or no neg­at­ive ef­fect on the em­ploy­ment of min­im­um-wage work­ers.” The au­thors didn’t say what “little” meant, El­men­d­orf told re­port­ers at a break­fast hos­ted by the Chris­ti­an Sci­ence Mon­it­or, but “the range we [the CBO] have looks to me like a little re­duc­tion,” he said.

El­men­d­orf did not re­spond dir­ectly to re­marks from the White House Coun­cil of Eco­nom­ic Ad­visers’ Jason Fur­man, who said the CBO view was “out­side the con­sensus view of eco­nom­ists when it comes to the im­pact of the min­im­um wage on em­ploy­ment.”

The White House’s cri­ti­cism of the non­par­tis­an budget ref­er­ee was a de­par­ture from its re­sponse two weeks ago, when CBO is­sued an equally con­tro­ver­sial re­port find­ing that Obama­care could re­duce the labor force by the equi­val­ent of 2 mil­lion full-time work­ers in 2017. The White House stepped for­ward to cla­ri­fy those find­ings, which the GOP was hold­ing up as proof the law was a “job-killer,” not to ques­tion them.

“I don’t want to re­spond dir­ectly to what the CEA has said,” El­men­d­orf said Wed­nes­day, re­fer­ring to the min­im­um-wage find­ings. “We try to talk about our ana­lys­is and let oth­er people talk about theirs.”

What We're Following See More »
WILL THEY MAKE THE INFRASTRUCTURE PACKAGE?
2,000 High-Risk Dams in Need of Repair
2 hours ago
THE DETAILS

If President Trump gets his wish and Congress delivers him a $1 trillion infrastructure package to sign, engineers will be clamoring to get a number of dams a piece of that pie. "Nearly 2,000 state-regulated high-hazard dams in the United States were listed as being in need of repair in 2015, according to the Association of State Dam Safety Officials. A dam is considered “high hazard” based on the potential for the loss of life as a result of failure. By 2020, 70 percent of the dams in the United States will be more than 50 years old, according to the American Society of Civil Engineers."

Source:
PLEDGES OBAMACARE REPEAL
Pence: White House Is in the “Promise-Keeping Business”
2 hours ago
THE DETAILS

"Over at the White House, I like to say we're in the promise-keeping business these days." That was Vice President Pence's message to CPAC on Thursday night. Specifically, he pledged to repeal and replace Obamacare, and reform the immigration system.

Source:
HAD ATTRACTED A CROWD TODAY
Alt-Right Leader Spencer Removed from CPAC
17 hours ago
WHY WE CARE
SAYS LEFT WILL GO INTO “MELTDOWN”
Cruz Predicts Another SCOTUS Vacancy “This Summer”
21 hours ago
THE LATEST
THE QUESTION
How Many Signatures Has the Petition for Trump’s Tax Returns Received?
23 hours ago
THE ANSWER

More than 1 million, setting a record. More than 100,000 signatures triggers an official White House response.

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login