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CBO: Hiking Minimum Wage to $10.10 Could Cost 500K Jobs...

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(Reuters)

Raising the U.S. minimum wage would lead to the loss of about half a million jobs by late 2016 but lift almost a million Americans out of poverty, the Congressional Budget Office forecast in a report on Tuesday that reignited debate over one of President Barack Obama's top priorities this year.

Buoyed by polls showing three-quarters of Americans in favor of a minimum wage hike, Obama and his fellow Democrats advocate raising the minimum hourly wage to $10.10 from the current $7.25 in a move to boost the stagnant wages of millions of low-income workers.

In the long term, Democrats also want to tie future minimum wage increases to inflation, avoiding the legislative fights over wages for lower-paying jobs.

The Obama administration challenged the CBO's estimates on potential job losses, citing the findings of a large group of private economists who saw little or no negative impact from a minimum wage hike.

White House Council of Economic Advisers Chairman Jason Furman said CBO's report failed to take into account that higher wages would make more workers more productive and save employers money through, for example, lower absenteeism in the workplace.

Republicans in Congress and allies in the business community have long argued that minimum wage hikes encourage employers to shed workers to help offset higher salaries, and have vowed to fight the move ahead of the congressional elections in November.  Keep reading at Fox Business News

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