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White House: Employers Prevent Job Losses After Min. Wage Hike by ‘Accepting Lower Profit Margins’
Pajamas Media ^ | 02/18/2014 | Bridget Johnson

Posted on 02/18/2014 5:10:32 PM PST by SeekAndFind

The White House lauded a Congressional Budget Office report on the proposed minimum wage hike to $10.10 per hour while brushing off one key finding: that such a bill could cost half a million jobs, and maybe more.

“The new Congressional Budget Office (CBO) report finds that 16.5 million workers would get a raise from increasing the minimum wage to $10.10 per hour and this would help millions of hard-working families, reduce poverty, and increase the overall wages going to lower-income households,” Jason Furman, chairman of the Council of Economic Advisers, and Betsey Stevenson, Council of Economic Advisers member, wrote in a White House blog post this afternoon.

“On employment, CBO’s central estimate is that raising the minimum wage to $10.10 per hour would lead to a 0.3 percent decrease in employment and CBO acknowledges that the employment impact could be essentially zero,” they continued. “But even these estimates do not reflect the overall consensus view of economists which is that raising the minimum wage has little or no negative effect on employment. For example, seven Nobel Prize winners and more than 600 other economists recently stated that: ‘In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.’”

The CBO report says that “once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects.”

“As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers,” the report adds.

The report also found that the maximum impact from a minimum wage hike would not be felt by families below the poverty line.

“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,” the report states.

“Once the increases and decreases in income for all workers are taken into account, overall real income would rise by $2 billion. Real income would increase, on net, by $5 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 3 percent and moving about 900,000 people, on net, above the poverty threshold (out of the roughly 45 million people who are projected to be below that threshold under current law).”

“Opponents claim raising the minimum wage won’t reduce poverty, but that is not the case, as many American who work full time are unable to make ends meet. This finding echoes the broad consensus of academic studies on the topic, which is nearly unanimous in finding that increases in the minimum wage reduce poverty,” Furman and Stevenson wrote for the White House.

“Overall the logic for the finding that raising the minimum wage does not result in large adverse impacts on employment is that paying workers a better wage can improve productivity and thereby reduce unit labor costs. These adjustments, along with others that firms can make, help explain why the increase in the minimum wage need not lead to a reduction in employment. Higher wages lead to lower turnover, reducing the amount employers must spend recruiting and training new employees. Paying workers more can also improve motivation, morale, focus, and health, all of which can make workers more productive. In addition, by reducing absenteeism, higher wages can increase the productivity of coworkers who depend on each other or work in teams. In addition, businesses can adjust in other ways rather than reducing employment (for example, by accepting lower profit margins). CBO’s estimates do not appear to fully reflect the increased emphasis on all of these factors from the recent economics literature.”


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: jobs; minimumwage; profitmargin; unemployment
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1 posted on 02/18/2014 5:10:32 PM PST by SeekAndFind
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To: SeekAndFind

He’s just trying to destroy capitalism.


2 posted on 02/18/2014 5:13:02 PM PST by SandRat (Duty - Honor - Country! What else needs said?)
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To: SeekAndFind

Bless his heart.

His JOB BLOCK Program is working as intended.

Aren’t we so fortunate that we have people like him, Harry Reid, Chuck U. Schumer, Mitch McConnell, John Wayne McCornyn, John Boehner, Eric Cantor, et all, in positions of power?


3 posted on 02/18/2014 5:14:17 PM PST by Howie66 (John Wayne McCornyn...he's just like US! Honest!)
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To: SeekAndFind

I’m sure stockholders have no problem with lower profit margins. /sarc


4 posted on 02/18/2014 5:15:03 PM PST by KirbDog
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To: SeekAndFind

May be fine for large companies, how about the small mom and pop outfits? They are, for the most part, already making minimum profit.


5 posted on 02/18/2014 5:15:41 PM PST by doc1019
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To: SeekAndFind

As an employer I have started people at minimum wage. The best case received a raise after one day, others at the 90 day mark, There are some that would and did stay at minimum wage as long as they worked for me.


6 posted on 02/18/2014 5:16:58 PM PST by woodenickel
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To: SeekAndFind

Every day he gets worse, the wretched marxist cur.


7 posted on 02/18/2014 5:17:14 PM PST by skeeter
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To: SeekAndFind

Employers don’t owe employees squat.

The only reason to be in business is profit and never to give someone a job!


8 posted on 02/18/2014 5:17:34 PM PST by dalereed
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To: SeekAndFind

Obama just keeps on delivering body blow after body blow to our economy.


9 posted on 02/18/2014 5:18:52 PM PST by lowbridge
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To: SandRat

unbelievable. What’s next, a limit on profits and everything over goes to the government?


10 posted on 02/18/2014 5:19:11 PM PST by morphing libertarian
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To: SeekAndFind

The buffoon in the White House is absolutely clueless. Bless his ignorant little heart!


11 posted on 02/18/2014 5:19:22 PM PST by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: morphing libertarian
unbelievable. What’s next, a limit on profits and everything over goes to the government?

Igsnay on the axestay. Don't give him any ideas.

12 posted on 02/18/2014 5:20:03 PM PST by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: SeekAndFind

“In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage...”

Well then, the argument is settled./sarc


13 posted on 02/18/2014 5:21:36 PM PST by Rusty0604
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To: SeekAndFind

We’re becoming Venezuela:

http://www.upi.com/Top_News/Special/2014/02/06/Venezuela-businesses-up-in-arms-over-moves-to-limit-profits/UPI-38731391724691/


14 posted on 02/18/2014 5:22:24 PM PST by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: morphing libertarian

combine “the IRS” and you get “Theirs”. MEA SARC


15 posted on 02/18/2014 5:22:26 PM PST by SandRat (Duty - Honor - Country! What else needs said?)
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To: woodenickel

Because as business owners we have money to burn, right?

I mean we should take business advice from a guy who never even held a job let alone ran a business.


16 posted on 02/18/2014 5:22:41 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: usconservative

hard to keep up with the daily madness coming from this guy

It’s going to be a long 3 years


17 posted on 02/18/2014 5:23:01 PM PST by morphing libertarian
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To: SeekAndFind

He's never run so much as a hot dog cart but he's going to tell every employer in America how to do their job?

18 posted on 02/18/2014 5:23:02 PM PST by 2ndDivisionVet (I will raise $2M for Sarah Palin's next run, what will you do?)
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To: SeekAndFind

As soon as the minimum wage goes up so does the cost of living by the same percentage. So, when the minimum wage went from 1.35 to 1.50 (back in my day), 1.50 became the new 1.35. Same with today’s minimum wage, it is the new 1.35 and any raise would only become the newer version of 1.35.


19 posted on 02/18/2014 5:23:22 PM PST by doc1019
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To: SandRat

intentional no doubt


20 posted on 02/18/2014 5:23:48 PM PST by morphing libertarian
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To: SeekAndFind

Employers should “accept lower profit margins.” That from the biggest flippin’ spender ever to hit the District of Corruption. Your government should accept lower tax rates, IDIOT!


21 posted on 02/18/2014 5:24:59 PM PST by FlingWingFlyer (As government expands, liberty contracts. - President Ronald W. Reagan)
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To: SeekAndFind
Most small business are at or near the line where the boss will take home less then their higher paid employees, so the boss will get to work eighty hours a week for five bucks an hour.

Or raise prices,....if their customers have not yet reached the point of price resistance.

In that case, the boss can just fire everybody and auction everything off. The taxpayers can support his ex-employees while they support GE and GM as well. He won't be one.

22 posted on 02/18/2014 5:25:57 PM PST by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
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To: SandRat

And he is doing a good job of destroying the jobs that are left.


23 posted on 02/18/2014 5:27:12 PM PST by Blood of Tyrants (Haven't you lost enough freedoms? Support an end to the WOD now.)
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To: KirbDog

Kinda like the left complaining about the huge profits of Walmart yet their profit margins are in the range of 3%.


24 posted on 02/18/2014 5:27:19 PM PST by griswold3 (Post-Christian America is living on borrowed moral heritage)
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To: morphing libertarian
They've already placed a limit on insurance company profits. And essentially on physician profits.

These "experts" will never get that these workers will not be better off when everything they have to buy goes up in price to pay for higher wages.

25 posted on 02/18/2014 5:28:43 PM PST by informavoracious (Open your eyes, people!)
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To: informavoracious

all power to the government and the hero of benghazi


26 posted on 02/18/2014 5:29:50 PM PST by morphing libertarian
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To: dalereed

“The only reason to be in business is profit and never to give someone a job!”

I was recently interviewed by the new president of a stumbling privately held company and he astonished me by saying, “It is our goal to be the best place in the city to work.” I said, “What do you mean by that?” He replied, “We want to be known for the highest pay and most generous benefits.” I’d already determined that one of their problems that would have directly affected my success there was overly generous benefits. I held my tongue. Unfortunately, they hired somebody else.


27 posted on 02/18/2014 5:31:29 PM PST by Gen.Blather
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To: SeekAndFind

The ideologue speaks his mind. Thank you Great Leader for mandating the profits of business owners.


28 posted on 02/18/2014 5:32:50 PM PST by AD from SpringBay (http://jonah2eight.blogspot.com/)
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To: morphing libertarian

Price controls working out so well in Venezuela


29 posted on 02/18/2014 5:34:38 PM PST by GeronL (Vote for Conservatives not for Republicans!)
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To: Howie66

Don’t forget that weasle McNasty and little Lindsay Graham in the list of enablers.


30 posted on 02/18/2014 5:34:57 PM PST by ptsal (Repubicans swallowing more kool-aide from Rove & Kristol)
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To: GeronL

just one riot away from a new government

maybe sean penn and oliver stone can put humpty dumpty back together


31 posted on 02/18/2014 5:36:25 PM PST by morphing libertarian
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To: doc1019
As soon as the minimum wage goes up so does the cost of living by the same percentage.

Obama says he wants to raise minimum wage from $7.25 to $10.10 by 2016. That's an increase of 39 percent. So the cost of living will go up 39 percent. As I'm on S.S., will my S.S. checks go up 39 percent by 2016 to allow me to buy $10 cheeseburgers? (Well, if a good cheeseburger meal costs about $7 now, then it'll be $10 later after a 39 percent increase.) No good will come from this meddling by the fool.

32 posted on 02/18/2014 5:36:53 PM PST by roadcat
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To: Gen.Blather

That sounds like a government entity and not a private company.

If it was a private company they will be out of business in short order!


33 posted on 02/18/2014 5:37:35 PM PST by dalereed
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To: ptsal

Absolutely!

There is an abundance of Back-Stabbers in Congress that demand to be held to account. The question is, will they?

Here in TEXAS we will do our part. Hopefully, we won’t be alone in “culling the herd” during our Primary Season.


34 posted on 02/18/2014 5:41:31 PM PST by Howie66 (John Wayne McCornyn...he's just like US! Honest!)
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To: SeekAndFind

I guess the evil Capitalists didn’t get the meme ‘Capitalism is EVIL ‘!!! /s


35 posted on 02/18/2014 5:44:14 PM PST by originalbuckeye ("A thing moderately good is not so good as it ought to be. Moderation in temper is always a virtue;)
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To: SeekAndFind

White House jackboot TOTALITARIANS have spoken on behalf of King Hussein.

Meanwhile, CONgre$$ chirps and the USSC runs interference for the U.S.A. - United Socialists of America

Check$ and Balance$?

The root cause of the devaluation of currency by the socialist created FED is never discussed.

$10,10 ? You don’t need 20/20 eyesight to see that “Socialism Is Legal Plunder”. The minimum wage has to keep up with the plunder, otherwise the low-information voters may get restless.

FED up?


36 posted on 02/18/2014 5:44:54 PM PST by PGalt
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To: doc1019

“May be fine for large companies,...”

Large companies are not paying ‘minimum wage’, but when it comes time for their bargining unit employees to demand a higher wage, ‘minimum wage’ comes into play. The Unions love ‘minimum wage’ hikes...they use it to get more money.

It all adds to INFLATION, and though they don’t know it, it means that, even with wage increases ‘tied to the minimum wage’, they will be worse off than before. Inflation is deadly...and the Fed is doing this to us, even with out a ‘minimum wage’ influence.


37 posted on 02/18/2014 5:52:44 PM PST by GGpaX4DumpedTea (I am a Tea Party descendant...steeped in the Constitutional Republic given to us by the Founders)
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To: SeekAndFind
businesses can adjust in other ways rather than reducing employment (for example, by accepting lower profit margins

 photo ThirdPartyFacepalm_zps7632fd15.jpg

38 posted on 02/18/2014 5:53:18 PM PST by mykroar (We fight, get beat, rise, and fight again. - Nathanael Greene)
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To: morphing libertarian

Shhhh!!! He is probably reading this, don’t give him any new ideas.


39 posted on 02/18/2014 5:54:01 PM PST by When do we get liberated? (A socialist is a communist who realizes he must suck at the tit of Capitalism.)
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To: SeekAndFind
so if you have four people working for you at $7.25per, you can give three of them a $2.85 raise, but the fourth one HAS TO GO... it's not rocket science
40 posted on 02/18/2014 5:56:18 PM PST by Chode (Stand UP and Be Counted, or line up and be numbered - *DTOM* -vvv- NO Pity for the LAZY - 86-44)
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To: SeekAndFind
Says the fairy whose never met a payroll with his own profits in his entire life.
41 posted on 02/18/2014 5:58:05 PM PST by E. Pluribus Unum (Islam is a religion of peace, and Moslems reserve the right to behead anyone who says otherwise.)
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To: SeekAndFind
Point by point, 0bama is issuing Directive 10-289:

Point Seven. All wages, prices, salaries, dividends, profits, interest rates and forms of income of any nature whatsoever, shall be frozen at their present figures, as of the date of this directive.

Government experts know best, after all. Because the current government is a paragon of economic propriety. Everyone in the press says so...well, they've been told to, anyway.

42 posted on 02/18/2014 5:58:09 PM PST by Billthedrill
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To: SeekAndFind
In addition, businesses can adjust in other ways rather than reducing employment (for example, by accepting lower profit margins).

In addition, government can lower taxes to help create more jobs. After all the pain should be shared, right Mr. Obama!

43 posted on 02/18/2014 6:03:03 PM PST by Lockbox
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*


44 posted on 02/18/2014 6:04:11 PM PST by tomkat (keeps checking in, hoping to see that ONE headline . . .)
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To: Chode

40 hours work at $7.25/hr = $290

29 hours work at $10.10 = $292

Coincidence ?? NOT

Obozocare is taking the workweek down to 29 hours for many minimum wage employees. Gotta pay them the same since the King says so!!!


45 posted on 02/18/2014 6:05:45 PM PST by datura (Democrat=Communist, GOP=Democrat, TEA=American)
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To: SeekAndFind

According to Wikipedia, Jason Furman’s life has been spent in academia, think tanks, politics, and government jobs — none of it in a productive business or even in a managerial role. He knows what real businesses do the same way Susan Rice knows that a film caused Benghazi.


46 posted on 02/18/2014 6:06:53 PM PST by Chewbarkah
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Dream on, Marxists.


47 posted on 02/18/2014 6:07:03 PM PST by Gene Eric (Don't be a statist!)
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To: SeekAndFind

Gee, at one time not too long ago the title would have been considered satire....


48 posted on 02/18/2014 6:09:29 PM PST by Popman ("Resistance to Tyrants is Obedience to God" - Thomas Jefferson)
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To: datura
whoa, outstanding catch!!! there it is...
49 posted on 02/18/2014 6:13:59 PM PST by Chode (Stand UP and Be Counted, or line up and be numbered - *DTOM* -vvv- NO Pity for the LAZY - 86-44)
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To: KirbDog

Sole proprietors may find that it’s easier closing the doors and investing rather than get weak returns along with all the problems attending commerce.


50 posted on 02/18/2014 6:17:20 PM PST by Tallguy
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