Wage-Rise Report Sees Fewer Jobs, Less Poverty

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from The Wall Street Journal,

Losses in Employment Partly Offset by Increased Purchasing Power.

President Barack Obama’s quest to raise the federal minimum wage to $10.10 an hour would eliminate about 500,000 jobs by 2016 but increase pay for millions of Americans and lift nearly a million out of poverty, a Congressional Budget Office report found.

The estimates released Tuesday by the nonpartisan budget office add fuel to the debate among economists and politicians about the impact of raising the minimum wage from the current $7.25 an hour.

The report nodded to economic arguments made by liberals and conservatives, predicting 16.5 million workers would benefit from an increase in the minimum wage, but also estimating that the job losses could hit a minority of workers.

Republicans pointed to the report’s predicted job losses as proof that raising the minimum wage would damage the economy. The White House, which has pitched a higher minimum wage as a top priority this year, disputed that conclusion and said an increase would help workers and spur economic growth.

The CBO said that a gradual increase to $10.10 an hour by July 2016 would eliminate 500,000 jobs, but lift 900,000 Americans out of poverty from the total of 45 million projected to be living in poverty in 2016.

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