What CBO Report? The State With The Highest Minimum Wage Is Adding Jobs.

[eridani]

http://ourfuture.org/20140305/what-cbo-report-the-state-with-the-highest-minimum-wage-is-adding-jobs

If you thought that the hotly contested Congressional Budget Office report, suggesting that a higher minimum wage would reduce the number of jobs, would squelch any chance of raising it, think again.

President Obama ratcheted up the pressure today, speaking out in favor of a $10.10 federal minimum wage at a Connecticut rally with four New England Democratic governors who are pledging to push for the same in their respective states.

And he now has a silver bullet to debunk those conservatives using the report, which only offered an estimated range of possibilities, as proof that raising the minimum wage is a certain job-killer.

Washington State.

The home of the Super Bowl champions is also America’s minimum wage champion, with the highest state minimum wage of $9.32. The minimum is also indexed to inflation, so it will never lose purchasing power.

Today Bloomberg checked in on how the Evergreen State’s wage policy has impacted job growth … and found that Washington State job growth beats the national average:

…job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate. Payrolls at Washington’s restaurants and bars, portrayed as particularly vulnerable to higher wage costs, expanded by 21 percent. Poverty has trailed the U.S. level for at least seven years.

Bloomberg noted that even if conservatives have a point that higher minimum wages have some negative impact on job growth, “Washington’s example shows that any such effects aren’t big enough to throw its economy and labor market off the tracks.”

While the CBO did project a slight reduction in jobs, it also projected that 16.5 million Americans would have higher incomes with a $10.10 minimum wage, including and beyond those directly earning the minimum. (With a $9 minimum, 7.6 million would earn more.)

Considering the Washington State banked those bigger payrolls without experiencing any net job loss, it seems pretty short-sighted to pass on raising the minimum just because of a flimsy projection of minor job losses that isn’t backed up by real world experience.

Republicans who think they can resist the drive for a higher minimum wage by waving the CBO report haven’t noticed that a higher minimum still polls phenomenally even after the report’s release.

Common sense and real-world experience will beat an academic paper

[LuvNewcastle]

1. But, but......Washington's full of stoned hippies!

We can't be like them!

[quaker bill]

2. Bad assumptions = bad report from CBO

The theory runs that there is just so much money that can be spent hiring people. If people start getting more of it in their checks by raising the minimum, fewer people will get checks because the money runs out sooner.

A consistent error in RW "economic analysis" is the notion that a pile of wealth creates jobs, and therefore the size of that pile of wealth and the manner in which it is divided will predict how many jobs can exist.

Wealth simply does not create jobs. Jobs are created by customers purchasing goods and services. No business owner who owns a business for long rejects customers who wish to purchase simply to avoid hiring people to produce the product. They will seek to minimize the cost of production, but will hire the people they need to meet customer demand. If the going rate for people is $10.10 an hour, they will pay it as a slice of the cost of production and adjust prices to assure a profit.

It is also a dynamic system. This means that increasing pay can, and likely will in many cases, result in more customers. A virtuous cycle can occur where higher wages results in more demand, more employment, and higher profits, all at once. It is important to remember that a large pile of dollars that sits in a vault is not real wealth, money in circulation generates real wealth, and the accumulated rate of circulation is more or less GDP.

[fasttense]

3. RepubliCON logic is always so muddled.

"If people start getting more of it in their checks by raising the minimum, fewer people will get checks because the money runs out sooner."

But they never consider the finite amount of money in an economic system. They think there is no end to it so a guy with a million making another million doesn't hurt anyone. But the truth is the guy with the million making another million is taking that million from someone else.

[littlewolf]

4. yup and as long as the GOP holds the house

this is a dead horse.

[merrily]

5. No matter who controls the House, the Senate filibuster (aka cloture) rule

apparently allows Republicans to block anything Republicans oppose. Seems as though Republicans get pretty much what they want when they are in the majority and also when they are in the minority.

[rhett o rick]

8. That's because this struggle isnt between R's and D's, it's between progressives and

conservatives. As we see in DU there are a lot of conservative Dems. The R's get their way because some D's are really DINO's as we saw with the rejection of Debo Adegbile even w/o the filibuster.

[underpants]

6. You can't dispute the GOP logic or results

You see they are all about capitalism (the Great Recession), fiscal discipline ($17 T in debt), and national security (9/11) so you can't dispute their logic or their results..... because they don't have any.

[Bill USA]

7. CBO report says there would be job losses..even WITH a net INCREASE in DEMAND (?!?)

usually, a net increase in demand is supposed to produce in increase in employment??? What gives CBO, a you've invented a new kind of economic model????


http://www.democraticunderground.com/101685523

...of course, if they did not properly calculate the change in demand from a 4.8% increase in prices (see below) and a 38% increase in buying power for some percentage of the 59% of the country's employed (1.6 million, of 75.3 million hourly employees, are paid the minimum wage, but CBO correctly indicated that increasing the wages of those at the minimum wage would lead to increases in others just above minimum wage to maintain the relative pay scale), the number of jobs lost could be zero or it may be a number of jobs GAINED depending on how buyers reacted to a given price increase (not specified by CBO) and given the 38% increase in buying power for some proportion of all hourly wage workers).
(more)

[rhett o rick]

9. One concern I've heard about raising the min wage is that there are a lot of people with jobs

having some responsibility that are currently earning just above min wage and dont want to be earning no more than a McDonald's employee.

Thanks for posting.

[eridani]

10. Which would mean even more money in the hands of people who will spend it n/t

[rhett o rick]

11. Looks like I failed at making my point. I am a big supporter of raising the min wage.

I applaud the good citizens of Washington the State (including myself) for supporting a higher min wage. I know some people that dont support raising the min wage because they have more responsibility and think they should get higher than the min wage. They see that if McDonald's employees makes the same as a teacher's aid, for example, then why would one take on the job with the higher responsibilities. I realize it's a sad reason but it's out there. I dont agree with it. I tell them they need to fight for higher wages. But with the labor market like it is that's not easy. I know I am still blathering, but hope you understand.