The CBO analyzes prospective hikes in the minimum wage and concludes the obvious - it benefits those who keep their jobs, but some job losses are highly likely.
Asked about the report while on a sun-drenched golf course Obama explained that "as with the ObamaCare subsidies, we had to destroy the working class in order to save it". No he didn't. Nor did he say that this was just another opportunity for the working poor to slack their way to success. But he could have!
The NY Times heroically resists the analogy to a foundering lifeboat, where the people on board can benefit many by pitching a haplees few overboard, but that is their message:
Minimum Wage Increase Would Have Mixed Effects, C.B.O. Report Says
WASHINGTON — A popular Democratic proposal to raise the minimum wage to $10.10 an hour, championed by President Obama, could reduce total employment by 500,000 workers by the second half of 2016. But it would also lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week.
That is the mixed conclusion of an assessment on how raising the minimum wage would affect incomes, employment and the federal budget. The report was released on Tuesday by the nonpartisan Congressional Budget Office, whose views often have a powerful influence on the fate of legislation.
Fans of Random Redistribution will like this overview of winners and losers:
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.
Folks worried that bored suburban teenagers won't be able to afford the latest X-Box with their minimum wage pittance can relax.
The CBO analysis of gains and losses models likely increases in some consumer prices due to higher wage costs, as well as lost income to business owners (whether that is mom and pop or WalMart). On balance, national income rises by about $2 billion for the second half of 2016; the longer run impact is roughly neutral, with a projected decline of total employment of 500,000, as noted above.
Zachary Goldfarb of the self-styled Wonkblog summarizes and mis-states that this way (my emphasis):
The CBO's report reminds us that the main effect of raising the minimum wage is to redistribute income from consumers and owners/higher-wage earners to lower-wage earners. As this chart shows, most people earning under six times the poverty line would benefit from the increase.
Really? The chart shows that, for example, as a group the families earning between 3 and 6 times the Federal poverty line have raw income gains of about $6 billion but net gains of about $2 billion. Presumably everyone in that group is experiencing higher prices (a loss) and some fraction of that group also has a minimum wage worker who kept his/her job and windfall. But what fraction? It may well be that 80% of the group has net losses and only 20% have net gains, even though the group as a whole comes out ahead. The claim that "most people earning under six times the poverty line would benefit" can't be confirmed from this data.