Congressional Budget Office Director Douglas Elmendorf is defending a recent report that estimated a White House-backed minimum wage hike could cost 500,000 jobs by 2016, findings that have come under fire from Democrats.
“I want to be clear that our analysis of the effects of an increase in the minimum wage is completely consistent with the latest thinking in the economics profession,” Elmendorf told reporters at a breakfast held by the Christian Science Monitor.
That estimate by the bipartisan office sent waves through Congress and the White House, which is actively advocating for the minimum wage increase from $7.50 to $10.10 an hour. While the report says the increase would result in improved wages for over 16.5 million workers, it also estimated that the number of jobs lost as a result could fall between a “very slight decrease to one million workers.”
Democrats quickly responded, saying the CBO report didn’t reflect other experts’ economic data. House Minority Leader Nancy Pelosi, D-Calif., said in a statement that the report’s “conclusions contradict the consensus among hundreds of America’s top economists, who predict that a wage hike would actually stimulate the economy, raise demand and job growth, and provide help in job creation.”
While Elmendorf would not respond directly to specific critiques of his report, he discussed one of the Democrats’ key pieces of evidence: a letter from a panel of economists who assert that a minimum wage hike would have “little or no negative effect on the employment of minimum wage workers.”
“That is not a random sample of economists, that is a set of economists that support raising the minimum wage,” Elmendorf said. “But nonetheless I don’t believe we would disagree with their statement of the evidence.”
Republicans took yesterday’s CBO report as vindication of their repeated claims that a federal minimum wage would cost jobs, calling the report proof that the policy would be “a devastating blow to the very people that need help most in this economy.”