New Government Report Finds Minimum Wage Increase Would Cost 500,000 Jobs

Date: February 19, 2014

Both Parties Look to Spin Report to their Advantage

A new report released on Tuesday by the non-partisan Congressional Budget Office found that increasing the minimum wage to $10.10 an hour, as proposed by President Obama would cost about 500,000 jobs. The report sparked a debate in Washington. Republicans argued that the report showed that increasing the minimum wage would have a significant negative impact on those that it is designed to aide. On the Democratic side, the response was more mixed. They focused on the projection that a number of Americans would be lifted out of poverty.

What It Means:

The new data are bound to complicate the President’s push to increase the minimum wage nationwide via federal legislation.

What’s Next:

The Senate will consider legislation from Iowa Sen. Tom Harkin (D) next month that would raise the minimum wage to $10.10 by 2016 in three steps. It is not clear if the House will take up such legislation, but it seems unlikely as the GOP leadership in that chamber opposes it.

Further Reading:

NFIB opposes the minimum wage increase. Read CEO Dan Danner's blog to see why. The NFIB Research Foundation published several studies on the minimum wage increase. Like most government mandates on business, raising the minimum wage will have a deep and disproportionate impact on the small-business sector.

The Washington Post, the AP, the New York Times, the Wall Street Journal, USA Today and Reuters all have coverage of the issue. Read the CBO report here.

This news article is intended to keep small business owners apprised of current events that may affect them. It does not necessarily reflect NFIB’s policy position on such issues.

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