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Labor Secretary Disputes CBO Report that Predicts Fewer Jobs After Minimum Wage Hike

$10.10 remains a priority for Obama along with making employers pay more overtime.

by
Rodrigo Sermeño

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March 14, 2014 - 4:07 pm
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WASHINGTON – Secretary of Labor Thomas Perez defended before a Senate panel Wednesday a proposal to boost the federal minimum wage, calling the argument that teenage workers would benefit most a “myth.”

The Senate Committee on Health, Education, Labor, and Pensions hearing came as the White House and Senate Democrats are pushing to increase the federal minimum wage to $10.10 an hour. The minimum wage, which was last raised in 2009, is currently set at $7.25 an hour.

Earlier this year, Sen. Tom Harkin (D-Iowa) introduced the Fair Minimum Wage Act that would raise the minimum wage in 95-cent increments over a three-year period, and then index the rate to inflation. The legislation would also increase the hourly wage rate for tipped workers from $2.13 to $3.00 during the first year, and then increase this amount by either 95 cents or an amount necessary to raise the rate to 70 percent of the minimum wage, whichever is less.

Republicans on the panel criticized the proposal, citing a report by the Congressional Budget Office (CBO) that found increasing the minimum wage to $10.10 per hour would reduce employment by about 500,0000 workers, or 0.3 percent.

“I believe families shouldn’t live in poverty but the idea of raising the minimum wage to address that is a stale, bankrupt, ineffective policy,” said Tennessee Sen. Lamar Alexander, the panel’s top Republican. “If the issue is jobs, than couldn’t we come up with a better proposal than one that the CBO said would cost 500,000 jobs?”

Alexander said there are several amendments that Republicans would like to offer to this bill but Democrats have denied them the opportunity to put these proposals forward.

Senate Democrats bypassed deliberation in committee over the bill back in January to bring the legislation up for a vote on the Senate floor.

“There are better ideas,” Alexander said. “Reform refundable tax credits to benefit all low-income workers, replace long-term unemployment compensation with job training, change Obamacare’s work week definition from 30 hours to 40 to encourage full-time jobs, and use existing federal education dollars to give children of low-income families a $2,100 scholarship to choose a better school.”

Perez disputed some of the CBO’s findings while emphasizing other parts of the report that predict raising the minimum wage would benefit millions of people and pull nearly a million out of poverty.

“The [CBO] indicates that 25 million people will benefit from an increase in the minimum wage,” Perez said. “The [CBO] agrees that roughly 12 percent are teenagers who benefit from the minimum wage, so we can put to rest once and for all this myth that raising the minimum wage only helps teenagers. I hear that time and time again – it’s wrong. The average age of a minimum wage worker is 35 years old.”

Perez referenced the experience of Washington state, which has the highest minimum wage in the nation, as an example that contradicts the assumption that the minimum wage reduces employment.

He said the bulk of the evidence shows that you can raise the minimum wage without having a negative impact on jobs.

“Six hundred economists, including seven Nobel laureates, have looked at this issue and concluded that the minimum wage has little or no impact on employment,” Perez said.

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Top Rated Comments   
We have a rogue government, consisting of Liars.

Not satisfied with Obama's 9.1% average unemployment over his first term, they seek to hike it again.

Reference: Einstein and insanity.

As though flipping burgers were a career.
19 weeks ago
19 weeks ago Link To Comment
All Comments   (8)
All Comments   (8)
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This has nothing to do with wages, purchasing power or the quality of life of entry level workers. This ONLY about the ability of entry level workers to pay union dues which, in turn, will be used to bribe politicians and government workers.
19 weeks ago
19 weeks ago Link To Comment
my neighbor’s sister makes $62 every hour on the internet . She has been without a job for seven months but last month her income was $17889 just working on the internet for a few hours.
Read Full Article ,,,,,,,,,,,,,,,,,,,,,,,,,,,,, http://www.Fizzjob.Com
19 weeks ago
19 weeks ago Link To Comment
So once again these people show they are either clueless about the economy or willing to lie and destroy the economy for a few political points. The economy readjusts to compensate for new expenses and new wealth. New expenses, like suddenly paying people more money without getting more or better work in return, depresses the economy and the prices of everything rises. New wealth, like producing more oil and lowering fuel prices, stimulates the economy, increases everyone's buying power—including minimum wage workers, and tends to lower prices. It is a simple Economics 101 problem.
19 weeks ago
19 weeks ago Link To Comment
Since "an increase in the minimum wage has no impact on jobs", why not raise the minimum wage to $100 an hour, and eliminate poverty entirely?

If that isn't enough, why not a $million an hour? That way everyone can be rich :)
19 weeks ago
19 weeks ago Link To Comment
We have the most amazingly clueless president ever. Jimmy Carter's looking sharp as a tack right now.
19 weeks ago
19 weeks ago Link To Comment
I don't think he's so clueless. He's a demagogue- seeking to cause rifts among us and exploit them to destroy the country. Burdening the economy just fits right in... push for a raise to help the most needy knowing all the while that it would come at the price of some of their employment.

During his 2008 campaign, Obama attacked Bush characterizing as unpatriotic the addition of $4 trillion to the national debt- which at that point stood at $10 trillion by year's end.

"The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents — #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic." -Barack Obama

However, during his five years in the Oval Office, we've seen the debt increase by $7 trillion... if $9-10 trillion was unpatriotic under Bush, what is $17 trillion under Obama? It's worse than unpatriotic, it's criminal- because he knowingly and willfully added to it- by among other things working to immediately greatly increase the size of the bureaucracy upon being inaugurated- and in doing so increase our need for borrowing. That increase in government size came in the form of Obamacare- demonstrated to be a job killer by design. It also by design causes people to lose their medical coverage... so at least under "unpatriotic" Bush the average working stiff could make payments against his or her $30,000 in national debt but under Obama we'd be stuck with our roughly $55,000 share per capita and we're far less likely to have a full time job to make those payments.

Obamacare was fast tracked through using every parliamentary trick in the book to sidestep debate- "We need to pass the law so that you can find out what's in it" -Nancy Pelosi

They KNEW what the law was all about and they KNEW the likely effects it would have not only on existing insurance policies but also its effects on employment. This is not incompetence, it is evil. The criminal scum that occupies the White House needs to be forcibly removed and made to face charges.
19 weeks ago
19 weeks ago Link To Comment
We have a rogue government, consisting of Liars.

Not satisfied with Obama's 9.1% average unemployment over his first term, they seek to hike it again.

Reference: Einstein and insanity.

As though flipping burgers were a career.
19 weeks ago
19 weeks ago Link To Comment
For some people, that *is* skilled labor.
19 weeks ago
19 weeks ago Link To Comment
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