Raising the minimum wage to $10.10 an hour will cost the U.S. economy a half-million jobs by 2016 but will substantially boost wages for most low-income workers, according to a Congressional Budget Office report released Tuesday that adds a significant hurdle to Democrats’ push for an increase.
Stung by the findings, the White House, which is still facing a sluggish job picture five years after the recession, scrambled for a response. It praised the nonpartisan agency’s finding that low-wage workers’ income would rise but said the CBO job numbers “do not reflect the overall consensus view of economists.”
Republicans predicted that the CBO report will bolster opposition on Capitol Hill, where the issue is likely to come up for votes in the next few weeks.
“Raising the minimum wage would slash jobs and harm an already fragile workforce,” said Sen. John Cornyn, Texas Republican. “Whether it’s Obamacare, a minimum wage hike, or a trillion-dollar stimulus bill charged to the nation’s credit card, the bottom line is the president’s big-government experiment kills jobs.”
The report marks the second time this month that the CBO has caused headaches for President Obama’s domestic agenda. A previous report found that by 2017, Obamacare would create economic incentives that would cause 2 million people to drop out of the labor force.