Raising Minimum wage will result in 500K fewer jobs

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers.

Many more low-wage workers would see an increase in their earnings. Of those workers who will earn up to $10.10 under current law, most—about 16.5 million, according to CBO’s estimates—would have higher earnings during an average week in the second half of 2016 if the $10.10 option was implemented. Some of the people earning slightly more than $10.10 would also have higher earnings under that option, for reasons discussed below. Further, a few higher-wage workers would owe their jobs and increased earnings to the heightened demand for goods and services that would result from the minimum-wage increase.

The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.

http://www.cbo.gov/publication/44995

1/3 of the increase in pay will go to families who are not living below the poverty line while only 1/5 of the increase will benefit those who live in poverty. Everyone will pay more for goods and services negating any temporary gains.  This will decrease the spending power of the middleclass & seniors, while doing little to help the poor.

Yet another government good intention that fails miserably in the real world. We should not have a major party promoting, as a centerpiece initiative and for perceived electoral gain, an executive order that would put a half million vulnerable people out of work.  If we go by the CBO’s track record…that number could end up being 3 times bigger.

They don't know that raising the minimum wage will result in the loss of 500 thousand jobs, and neither do you. Meanwhile, raising the minimum wage will give raises to 16.5 million workers and lift 900 thousand out of poverty. Republicans apparently don't like lifting 900 thousand people out of poverty!

News Buzzard wrote:They don't know that raising the minimum wage will result in the loss of 500 thousand jobs, and neither do you. Meanwhile, raising the minimum wage will give raises to 16.5 million workers and lift 900 thousand out of poverty. Republicans apparently don't like lifting 900 thousand people out of poverty!

It doesn't take too many brains to figure it out, NB.

You're right, WHL! The report suggests that the CBO has no idea what the job losses will be. Their range starts at very slight and goes up to 1 million!   

http://mediamatters.org/blog/2014/02/19/watch-this-cnn-anchor-stop-the-spin-on-the-mini/198115

http://www.cbo.gov/publication/44995?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=812526&utm_campaign=0

News Buzzard wrote:They don't know that raising the minimum wage will result in the loss of 500 thousand jobs, and neither do you. Meanwhile, raising the minimum wage will give raises to 16.5 million workers and lift 900 thousand out of poverty. Republicans apparently don't like lifting 900 thousand people out of poverty!

Right on cue.  “The Republican’s don't like lifting 900 thousand people out of poverty.”

You can’t make the argument, so vilify your opponent.

Raising the minimum wage WILL hike inflation and will eliminate jobs.

By my count this would cost business 55 billion annually.

Do you really think business will eat the higher cost?  Of course not.  

Business will pass higher costs onto the consumer, they will automate where they can, they will eliminate positions and they will hire less. Some jobs and some people just don't justify 10 bucks an hour and those jobs will go away.

Nothing will really change for the minimum wagers. They are still at square one, no better or worse off than before.  Sure they get more money in their paycheck, but everything costs more.  So where is the gain?

Nothing changes for the upper class. What do people making $30 to $50+ an hour care if prices went up a few dollars?
When you give some you must take from others.

It's the middle class workers that suffer. They won’t be getting a raise, yet the price of everything will go up. This will shrink the gap between middle and lower class and growing the divide between the wealthy and poor.

Minimum Wage is not meant to feed a family of four. Minimum wage jobs are not careers; they are entry level jobs for unskilled workers. Raising the minimum wage just makes it harder for new workers to reach the first step of the economic ladder.  If you have chosen a $7/hr. job as a career, then you are not suddenly worth $10/hour because Obama said so.

You can't raise taxes on people who work, increase the payouts to people who don't work and expect more people to work. That's not the way the world works.

Raise the price of something, and people will buy less of it.  If it is a necessity, than non-essentials will decline.

How does Costco buck the trend? They pay their employees well and provide benefits, and are very successful.

Why do I have to make any point when the CBO said that job loss may be negligible? We'll see how the Republicans dodge this and an extension of unemployment benefits in swing states.

I guess you miss the irony here. You are all for pushing the minimum wage to $10.10 while using Costco as an example that does it without government intervention. Costco is an example of Capitalism at its best and is a great example of the “free market” working. The economy would grow and we would see more of this if politicians just left it alone.

The CBO is unsure of the job loss numbers...it could be negligible; it could be in the millions.


Here are 3 inarguable laws that govern economics.

1. Any levy imposed on business by the government gets passed on to the consumer.

2. Companies will deal with increased labor costs as they always have:
a. Move production over overseas.
b. Institute a hiring freeze/ Lay off employees.
c. Raise prices.
d. close

Often, companies do several, accelerating the economic decline.

3. When companies are forced to absorb increased costs, be they raw materials or minimum wage hikes, they raise prices. As prices rise faster than income, inflation shoots through the roof, so the 10 things in your grocery cart, which had cost $80, now runs you $100.

And don’t forget that the government’s “official” inflation rate ever-so-conveniently omits skyrocketing fuel and food prices.

The very people minimum wage is supposed to help will pay more for everything. Minimum wage hikes, while well-intentioned, result in negative unintended consequences.

For some reason, Outer, the libs just can't get it through their thick skulls that as the cost of business rises, so does the costs of the products they sell. And as prices rise, sales decrease and business slows and companies have to lay off. I don't know why the libs just don't understand that. They think they can keep dictating expenses for businesses and expect the businesses to still succeed.

The CBO did the Democrats a favor by identifying 16.5 million people who would have gotten a raise if the minimum wage went up. Those 16.5 million will show up at the polls in November, and the 1% only get 1% of the vote!

Here in lies the attitude and the mindset that is destroying this country.  

Instead of doing what is right, we think about what gets the most votes.   Often times the right course of action makes a terrible bumper sticker and is not all that popular.

You have made it perfectly clear that you are ONLY concerned with the next election.  All your arguments are based on winning the next popularity contest.   At times there are logical arguments to be made for your point of view but YOU never make them.  You ALWAYS go back to elections. You can only give the talking-points for the dumbed down masses.


In this case the Democrats want to use raising the minimum wage as a political tool.  

“Vote for Democrats and we will give you a raise.”

.
The ONLY way raising the minimum wage to $10.10 will lift the poor out of poverty is if companies simply absorb the additional cost.


Do you believe that will happen?
Do you believe the small business owner will take a pay-cut?
Do you believe the corporation will pay their shareholders less?
Do you believe the business operating on the slimmest of margins will operate at a loss?

Of course they won’t, they will pass the costs on to the consumer and eliminate expenses (JOBS).  Business pays NO TAX, they simply pass it on to the consumer.

In spite of the economic downturn companies are seeing record profits.  Now why is that?  Its’ because these companies have become more efficient.  They have lowered their cost, and their employees work harder.

If the government raises the cost of doing business, they will tighten their belts once again.  They will seek markets with lower costs, they will automate, they will eliminate staff and they will ship the jobs overseas.

Outerlimits wrote:You have made it perfectly clear that you are ONLY concerned with the next election.

 

"Our primary purpose is to make Obama a one term president"   Mitch McConnell

Outerlimits wrote:In spite of the economic downturn companies are seeing record profits.  Now why is that?

 

That's more of a reason to give their employees a raise, and contradicts the "pass on the costs theory". (Thank you!)

Outerlimits wrote: If the government raises the cost of doing business, they will tighten their belts once again.  They will seek markets with lower costs, they will automate, they will eliminate staff and they will ship the jobs overseas.

They'll do that, regardless of the minimum wage hike. Big business in this country doesn't give a crap about their employees. You have to get out of bed with big business!!

The GAP is raising their employee's wages:

http://thinkprogress.org/economy/2014/02/19/3306841/gap-raising-minimum-wage-10/

News Buzzard wrote:The GAP is raising their employee's wages:

http://thinkprogress.org/economy/2014/02/19/3306841/gap-raising-minimum-wage-10/

You think that's Progress?

Some people don't understand Economics, NH.

News Hawk wrote:

News Buzzard wrote:The GAP is raising their employee's wages:

http://thinkprogress.org/economy/2014/02/19/3306841/gap-raising-minimum-wage-10/

You think that's Progress?

I think giving 16 million people a raise and lifting 900 thousand people out of poverty to be great progress!! I have yet to nor will I ever get an answer about Costco. How can they afford to start their people at $17 an hour, give them health insurance and be wildly successful? You're all telling me that I don't understand economics, but the experts are saying that more disposable money in the hands of lower income people will have nothing but a positive effect on the economy. So do any of the so called experts here have an answer for Costco's success?

First off, what authority does the Federal Government have to force a company to pay a certain wage?

Second, Costco’s minimum wage is: $11.50.  Costco pays their employees well because they expect their employees to be better than average (Walmart has 2.5 times more employees per square foot). What's going to happen to all the below average workers when the minimum wage rises?  Do you think employers are going to settle for sub-par, unskilled employees at a Costco level pay? Nope, these workers will no longer be employed and we'll see the UI and Welfare rolls surge.


Giving a raise to 16 million sounds great, but in reality, it only raises the cost of living for EVERYONE.  Wages are the symptom and the underlying problems is the fact the cost of living is simply too high.

What is driving up the costs for goods and services?

Obama either does not have a clue, or he is playing politics.  IF he really wanted to help the poor and the economy, he would be talking about reducing the cost of living.  It would be far more effective to help low wage earners and in fact the entire economy by reducing the cost of energy. Cheap energy equates to a strong economy…PERIOD.

Want to help the low wage earner? Cut the price of gasoline, natural gas, and electricity. That, in turn, reduces the cost of all other goods and services.

Obama thinks he can legislate its way out of poor wages and a bad economy.  He can’t, raising the minimum wage will kill jobs and it will decrease the purchasing power of the poor and the middle class. -Try and spin that…you can’t.

Well said, Outer!!!

Outerlimits, if you're telling me that Walmart has that many more employees than Costco then I'm going to assume that you've never been in Costco, and I'm glad you brought up Walmart because an economist for Bloomberg says that they would only have to charge 1 penny more for a DVD if the minimum wage was hiked.

http://thinkprogress.org/economy/2014/02/21/3317901/walmart-minimum-wage-prices/

As far as energy goes, I don't think you realize how cheap electricity is. If I had to power my house with my 40 AMP generator it would cost me $1 thousand a month. Our prices on gasoline and heating oil is determined by the private sector, not government. Remember capitalism! You all seem to lecture us on capitalism, unless of course you think you're paying too much for gas. Then it's Obama's fault!   

Walmart has 1.4 million employees 4400 Stores
Costco has 107,000 employees 447 BIGGER stores.
Do the math.   

UC Berkeley study estimated Wal-Mart would lose nearly $2.4 billion annually. That's 15% of Wal-Mart's entire net income of $16 billion.

That is a LOT of DVDs.   

Raising minimum wage only helps the people that are working for less than $10.10 AND won't be laid off. According to the congressional report in this article 5 of every 9 that would get the pay raise will lose their jobs. Aside from that, those sitting comfortably in the middle class range (or anywhere below that point) will be adversely impacted because of the price that will be passed on to them. If a kid is getting paid $10.10 to bag groceries at the market, your milk, bread, produce, and everything else you buy will go up to pay for that.

Cost of living takes a massive jump up, minimum wage STILL won't be enough to pay for all the luxuries people think they are entitled to, some in the middle class will be pulled down to the lower class because their pay hasn't been adjusted for the cost of living.

The middle class will have less purchasing power, and more than half the poor will become poorer. Nobody wins in this, except the worthless politicians that back it up in exchange for ignorant liberal voters and the media who is married to the politicians and continue to vilify businesses for trying to make money.

As for your claim that energy is cheap, you are absolutely full of it.  With home heating oil costing $4.00/gallon here in NH. $3.40 for gasoline, good luck trying to sell that.
 
“Your electricity rates will necessarily skyrocket” -remember that quote?

The Federal government is RESPONSIBLE for skyrocketing energy cost…not capitalism.

When the Feds print money making our dollar worth less, they raise the price of energy.
When the Feds outlaw coal, they raise the price of energy.
When the Feds block the pipeline, they raise the price of energy.
When the Feds block drilling and exploration, they raise the price of energy.
These ACTIONS have nothing to do with capitalism.

What about seniors, on a fixed income collecting social security?  What do you think the rise in price of a groceries and heating oil will do to them?

I'm a mind reader...You will want to increase their SS checks.

Outerlimits wrote:I'm a mind reader...You will want to increase their SS checks.

Great idea!! Millions of seniors are living in poverty!

First of all, a Super Walmart is bigger than Costco and every Costco store is loaded with employees.

Second of all, the article I posted quotes an economist who is the Chair of the Labor Center at UC-Berkeley, and he says that the extra cost to Walmart for a hike in the minimum wage would be $200 million. You say it would be $2.4 billion.

So who do I believe, the economist from Berkeley or you? (That's a rhetorical question)

Outer, the problem with NB and other libs is that they want to give everything away but they think money grows on trees. They don't stop to think where that is coming from and that there is not and endless supply (despite what they would like to think).

And as far as gas prices, yes it is Obama's fault and every politician before him who made gas TAXES so high and spent that money on other things than our roads.

News Buzzard wrote:"Millions of seniors are living in poverty!"

The only impoverished seniors I see are smokers.

Beside that point, both Wal-Mart and Costco must pay the suppliers who provide America's clothing from impoverished countries. One can expect that the age at which a worker is hired will drop.  

(Countries that supply our mostly-imported clothing: Honduras, Guatemala, Vietnam, Pakistan, Bolivia, China—to name a few).




.

WHL wrote:Outer, the problem with NB and other libs is that they want to give everything away but they think money grows on trees.  They don't stop to think where that is coming from and that there is not and endless supply (despite what they would like to think).

You don't have a clue about how I feel on spending, WHL, and our taxes are much lower than they were prior to Ronald Reagan's giveaway to the rich with his massive tax cuts. (and along came Bush)

WHL wrote:And as far as gas prices, yes it is Obama's fault and every politician before him who made gas TAXES so high and spent that money on other things than our roads.

Please tell me when the oil companies became nationalized, and what percentage of the price of a gallon of gas goes to taxes? The federal gas tax has been the same since 1993 and the NH gas tax has been the same since 1991.  You always love big business, unless of course it's screwing you!

The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel.[1][2] On average, as of January 2013, state and local taxes add 30.4 cents to gasoline and 30.0 cents to diesel, for a total US average fuel tax of 49.5 cents per gallon for gas and 54.8 cents per gallon for diesel.[3]

There is also a federal environmental tax on diesel. There are other taxes on trucks also.

WHL wrote:The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel.[1][2] On average, as of January 2013, state and local taxes add 30.4 cents to gasoline and 30.0 cents to diesel, for a total US average fuel tax of 49.5 cents per gallon for gas and 54.8 cents per gallon for diesel.[3]

There is also a federal environmental tax on diesel.  There are other taxes on trucks also.

Thank you for your answer. Now you say that state and local taxes add 30.4 cents to a gallon, but what are our local taxes in NH that would be on top of the 19 cents a gallon we currently pay?

Assuming that the price of gas is currently $3.50 per gallon, the taxes on that gallon would amount to approximately 14% of the price. If all of the taxes were eliminated on a gallon of gas the price would still be $3 a gallon.

So why is this all Obama's fault?