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Republicans' minimum wage conundrum

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Republicans' minimum wage conundrum Empty Republicans' minimum wage conundrum

Post by confuzzled dude Wed Nov 11, 2015 6:39 pm

Our friends at PolitiFact have compiled a chart showing the years Congress raised the minimum wage, and the months of job growth in the following one-year period. The chart shows that between 1978 and 2009, raising the federal minimum wage did not always result in a job loss or job growth. In fact, it was split almost evenly; out of the 11 times the minimum wage was raised, there was overall job growth six times, and overall job loss five times.

Still, the Congressional Budget Office projected that raising the minimum wage to $10.10 from the current wage of $7.25 per hour would result in about 500,000 fewer workers having jobs — and possibly up to 1 million workers would be affected. Raising the minimum wage to $9 per hour could result in 100,000 to 200,000 jobs lost, the CBO projected.

However, many more low-wage workers’ earnings would increase as a result of raising the minimum wage, the CBO found. Under the $10.10 option, 16.5 million workers with hourly wages less than the proposed minimum would see an increase in their earnings. Under the $9 option, 7.6 million workers would see an increase.
Conventional economic analysis may show that increasing the minimum wage reduces employment by increasing the cost to employers, and by raising the cost of low-wage workers relative to other inputs like machines or technology, the CBO wrote. But conventional economic analysis might not always apply, according to the CBO: “For example, when a firm is hiring more workers and needs to boost pay for existing workers doing the same work — to match what it needs to pay to recruit the new workers — hiring a new worker costs the company not only that new worker’s wages but also the additional wages paid to retain other workers.

https://www.washingtonpost.com/news/fact-checker/wp/2015/11/11/fact-checking-the-fourth-round-of-gop-debates/?hpid=hp_rhp-top-table-main_factchecker-1235am%3Ahomepage%2Fstory

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