We find interesting the conflicted response of President Obama’s White House Council of Economic Advisers to the new report by the nonpartisan Congressional Budget Office on the effects of a minimum wage increase on employment and family income.
In a post appearing on the White House website, council Chairman Jason Furman and council member Betsey Stevenson hailed CBO’s finding that hiking the federal minimum wage to $10.10 — as Senate Democrats propose, and Mr. Obama supports — would give 16.5 million workers “a raise,” as Mr. Furman and Ms. Stevenson put it.
They also embraced CBO’s finding that boosting the minimum wage would lift 900,000 Americans out of poverty (out of some 45 million currently subsisting below the poverty line).
The two White House economists took issue, however, with CBO’s estimate that the proposed increase in the federal minimum wage of nearly 40 percent — to $10.10 in 2016 from $7.25 currently — will cost an estimated 500,000 workers their jobs.
Mr. Furman and Ms. Stevenson did not go as far as, say, the Economic Policy Institute, which issued a report in December actually suggesting that the proposed minimum wage hike would add 85,000 jobs to the economy.
They simply argued that CBO’s calculations “do not reflect the overall consensus view of economists which is that raising the minimum wage has little or no effect on employment.” And that “overall consensus,” they stated, included “seven Nobel Prize winners and more than 600 other economists.”
CBO director Douglas Elmendorf on Wednesday responded to the attacks the minimum wage report has elicited from Mr. Obama’s economic advisers and Democrats on Capitol Hill, who planned to use their proposed minimum wage hike as a wedge issue for this year’s midterm elections.
“I want to be clear,” Mr. Elmendorf told reporters, “our analysis is completely consistent with the latest thinking in the economic profession.” As to the analyses cited by Mr. Furman and Ms. Stevenson, the CBO director noted “most other economists don’t have to put numbers behind the words of their evaluations.”
Indeed, we recall that some 200 economists — including six Nobel Prize winners for economics — endorsed Mr. Obama’s 2009 economic stimulus legislation, which, his White House Economic Council promised, would both increase the nation’s economic output by 3.7 percent and create a net 3.6 million jobs by 2010.
As the record shows today, U.S. economic growth was less than two-thirds of what Mr. Obama’s White House economists promised; what the half-dozen Nobel Prize winners endorsed. Net job creation was less than a third of what the American people were told to expect.
That begs the question: If the president’s economic advisers so grossly overestimated the effects of the Obama stimulus on economic growth, if some 200 economists, including six Nobel laureates, also got it wrong, why should the American people think they’ve gotten it right on the minimum wage?
We trust the findings of the nonpartisan CBO.
— From the Orange County Register