Today's CBO report has lots of reasons to raise the minimum wage, but you're not hearing about them because the spinners are already lighting their hair on fire, screaming about their estimate that as many as 500,000 jobs might be lost as a result of an increase in the minimum wage to $10.10 per hour by 2016.
According to EPI, it appears that the CBO took a very conservative position using the very same data that 600 economists used as their basis to sign a letter to Congress urging an increase.
Aside from that employment estimate, the CBO found many benefits from a minimum wage increase:
- CBO finds that raising the minimum wage to $10.10 per hour would directly benefit 16.5 million workers. According to today’s CBO report, 16.5 million people making less than $10.10 per hour would get a raise if the minimum wage is increased. This figure does not include CBO’s estimate of as many as 8.0 million workers who currently earn just above $10.10 an hour but could also potentially see a raise due to the “ripple effect” of a shifting wage structure.
- CBO finds that raising the minimum wage would increase income for millions of middle-class families, on net, even after accounting for its estimates of job losses. Middle class families earning less than six times the poverty line (i.e., $150,000 for a family of four in 2016) would see an aggregate increase of $19 billion in additional wages, with more than 90 percent of that increase going to families earning less than three times the Federal poverty line (i.e., $75,000 for a family of four in 2016). On net CBO estimates that national income would rise.
- CBO finds that this wage increase would help the economy today. Specifically CBO finds that the extra purchasing power for workers will expand aggregate demand and strengthen the economy today. As CBO wrote, “Raising the minimum wage increases that demand, in CBO’s assessment, because the families that experience increases in income tend to raise their consumption more than the families that experience decreases in income tend to reduce their consumption. In the short term, that increase in demand raises the nation’s output and income slightly.”
How about the moral reason reason to raise it? It is immoral for employees to work for a wage that leaves them in poverty and in need. Economic estimates and CBO projections aside, it is simply immoral for people to work for a wage that won't even sustain the bare minimum to survive.
Remember that when you hear all the corporate news outlets spinning this, and especially when you hear Republicans spinning it.