Tags: CBO | minimum | wage | 8.25

CBO Report Confirms Raising the Minimum Wage to $8.25 Is Best Option

Wednesday, 19 Feb 2014 10:52 AM

By Peter Morici

A new Congressional Budget Office (CBO) report confirms raising the minimum wage in line with inflation to $8.25 is the best course. It would likely not create much additional unemployment, still put billions of dollars in the pockets of the working poor and do less damage to the economy.

The CBO analysis finds raising the minimum wage to $10.10 an hour as the president proposes would likely kill 500,000 jobs. It found even a more moderate increase to $9.00 would increase the jobless figure to 100,000.

The minimum wage was last adjusted to $7.25 in 2009, and adjusting it for inflation to $8.25 would not further raise the cost of labor relative to labor-saving machinery. Hence, it comes as no surprise that the CBO findings infer that such an increase would not appreciably increase unemployment and would still provide benefits of additional income to the working poor.

Editor's Note: Get Rich Doing This ‘One Thing’ Every Day

Any floor for wages — or increase in that floor — reduces overall productivity and economic welfare by distorting markets. In particular, the minimum wage encourages the overuse of labor-saving machinery in low-skilled activities at the expense of other investments in more promising pursuits — and destroys jobs.

Still as most Americans seem supportive of additional measures to support the earning power of low-skilled workers, raising the minimum wage to $8.25 is the best compromise.

Earlier this month, I argued that raising the minimum wage to $10.10 as President Obama proposes would be terribly harmful, and a more modest increase to $8.25 is the best course.

The CBO study confirms my analysis.

© 2015 Moneynews. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Experts: Iran Now a Nuclear-Ready State, Missiles Capable Hitting US

Sunday, 01 Feb 2015 18:30 PM

Regardless of intelligence uncertainties and unknowns about Iran's nuclear weapons and missile programs, we know enough  . . .

Ben Carson: Obama Letting Islamics 'Destroy Us'

Sunday, 01 Feb 2015 16:26 PM

Dr. Ben Carson, an expected GOP presidential contender, said he wants to see the size of government reduced if he one da . . .

Justice Department Probes Moody's for Mortgage Deal Grades: WSJ

Sunday, 01 Feb 2015 17:32 PM

The U.S. Department of Justice is investigating Moody's Investors Services for issuing favorable grades on mortgage deal . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved