Corsicana Daily Sun, Corsicana, Texas

Latest News

February 18, 2014

Report: Minimum wage hike would help, hurt economy

WASHINGTON — Boosting the federal minimum wage as President Barack Obama and congressional Democrats are proposing would increase earnings for more than 16.5 million people by 2016 but also cut employment by roughly 500,000 jobs, Congress' nonpartisan budget analyst said Tuesday.

In a report containing ammunition for both supporters and opponents of the Democratic election-year proposal, the Congressional Budget Office said gradually raising the minimum from $7.25 hourly to $10.10 would lift 900,000 people above the federal poverty level by 2016. That is out of 45 million who would otherwise live in poverty without an increase.

But the analysis also noted a down side: About 0.3 percent fewer jobs, higher costs for business owners and higher prices for consumers.

The study was unveiled as the Senate prepares for a March debate on the Democratic plan ramping up the minimum in three steps to $10.10 by 2016. The proposal is backed by Obama and is a keystone of Democrats' campaign-season plans to highlight their effort to make incomes more equitable, but it faces strong Republican opposition and long odds of approval by Congress.

The analysis immediately added fuel to the partisan dispute over the proposal. It put authoritative weight behind long-time GOP claims that increasing the minimum wage would cost jobs by forcing companies to spend more on wages.

“This report confirms what we've long known: While helping some, mandating higher wages has real costs, including fewer people working,” said Brendan Buck, spokesman for House Speaker John Boehner, R-Ohio. “With unemployment Americans' top concern, our focus should be creating — not destroying — jobs for those who need them most.”

Democrats have said such claims are overblown and outweighed by the benefits to workers and the overall economy as low-paid employees spend more money. Sen. Tom Harkin, D-Iowa, author of the Senate legislation, cited other research concluding that a higher minimum wage would create jobs, not reduce them.

“And as the CBO report affirms, an increase in the minimum wage will help lift families out of poverty,” Harkin said.

The study also examined the impact of boosting the minimum wage to just $9 hourly by 2016. That lesser increase would have smaller effects: About 100,000 fewer jobs, higher wages for 7.6 million workers and 300,000 people lifted out of poverty.

The report said the increase to $10.10 would add $31 billion to the earnings of low-wage workers. But it noted that only 19 percent of that increase would go to families earning less than the poverty threshold, while 29 percent would go to families earning more than triple the poverty level. That is because many low-wage earners are not in low-wage families.

“No matter how the critics spin this report, the CBO made it absolutely clear: Raising the minimum wage would lift almost one million Americans out of poverty, increase the pay of low-income workers by $31 billion, and help build an economy that works for everyone,” said House Minority Leader Nancy Pelosi, D-Calif.

The CBO study examined a proposal similar to Harkin's and focused on the plan's impact in late 2016, when it would take full effect. After 2016, Harkin's bill would require the minimum wage to be increased annually to reflect rising inflation.

The analysts said their estimate of employment losses was approximate. They said the actual impact could range from a very slight employment reduction to a loss of 1 million workers.

The report said that besides boosting wages for people earning less than $10.10 hourly, some people making more than that amount would also see higher earnings as bosses adjust their pay scales upward.

Some people's incomes would grow as their earnings increase, causing them to pay more taxes. But for others, income would fall — reducing their tax burden — and still others would begin collecting unemployment insurance.

As a result, the budget office said federal budget deficits would probably decrease slightly for a few years but then increase slightly after that.

—————

Want to “Soundoff” on this story? Email: soundoff@corsicanadailysun.com

1
Text Only
Latest News
  • 7-25-14 CAC boat.jpg Floating a big fundraiser idea

    The big night is fast approaching for the 10 Grand Country Jam, an Aug. 2 fundraiser for the Child Advocates of Navarro County. What will make it a big night is the grand prize, a $31,000 pontoon boat.

    July 24, 2014 1 Photo

  • Candelario Garcia Jr. (main) Honoring a hero

    Since March of this year, the family of Candelario Garcia Jr. has been so proud of him, they could burst.

    July 23, 2014 2 Photos

  • County Budget Commissioners start budget process

    The Navarro County Commissioner’s Court held its first budget workshop Wednesday, the first of a dozen or more over the next month or so.

    July 23, 2014 1 Photo

  • 7-23-14 pianos main.jpg Public pianos invite players

    Corsicana has always been a musical town, with emphasis on country and western, rock and roll, bluegrass and Gospel, but now the parks and recreation department is moving towards bringing music to the masses in a different way. They’re going to put pianos downtown, on the sidewalks for anyone to play at random.

    July 23, 2014 1 Photo

  • Navarro County 4-H Club holds event

    Texas A&M AgriLife Extention will hold Summer Exploration Days at the Navarro County Expo on Tuesday, July 29 from 8:30 to 11:30 a.m.

    July 22, 2014

  • New date for IPL Job Fair announced

    Tarrant Regional Water District IPL (integrated pipe line) Project will hold a Job Fair from 4 to 7 p.m. Wednesday, Aug. 20, 2014 at The Cook Center.

    July 22, 2014

  • Making voting easier

    A new county-wide voting system would let voters cast a ballot at any polling place on election day, eliminating the need to drive to a specific precinct to vote.

    July 22, 2014

  • Aaron Tidwell Tidwell tapped for top Mildred High post

    A baseball coach at heart, about a year ago Aaron Tidwell began to seriously focus on education administration. He just didn’t think an opportunity would present itself so soon. Mildred Independent School District board members approved the 31-year-old Corsicana native as the high school’s new principal Monday night.

    July 22, 2014 1 Photo

  • OCIW treasure Mantle worthy: Oil City presented with Texas Treasure Business Award

    Maybe Oil City Iron Works is worth double the treasure. After all, the local icon honored Monday with a state award for employers in business for 50 years has actually been around for 128.

    July 21, 2014 2 Photos

  • 7-22-14 meth raid.jpg Five arrested in meth raid

    The Corsicana Police Department executed a raid on an alleged meth house Saturday afternoon, and it was done in about 45 minutes, all but the paperwork.
    “That part is on-going, reports and follow-up,” said Police Chief Randy Bratton on Monday.

    July 21, 2014 1 Photo