News / Economy

    US Budget Agency Defends Wage Report After White House Criticism

    Congressional Budget Office Director Doug Elmendorf testifies before the House Budget Committee hearing on the nation's economic outlook, on Capitol Hill in Washington, Feb. 1, 2012.
    Congressional Budget Office Director Doug Elmendorf testifies before the House Budget Committee hearing on the nation's economic outlook, on Capitol Hill in Washington, Feb. 1, 2012.
    Reuters
    The head of the U.S. Congress' budget agency on Wednesday defended its findings that President Barack Obama's proposed minimum wage increase would cause job losses, a day after the White House criticized the agency's methodology.

    White House officials have taken issue with the Congressional Budget Office's conclusion that raising the minimum wage to $10.10 per hour would lead to a loss of about half a million jobs by late 2016.

    The administration's criticisms of the non-partisan CBO were unusual, given the respect that the agency commands from both Republicans and Democrats as Washington's referee on budget and economic issues.

    CBO director Doug Elmendorf pushed back against suggestions the agency had not taken into account some research on the effects of raising the minimum wage.

    “Our analysis is quite consistent with the latest thinking by economists,” he told reporters at an event sponsored by the Christian Science Monitor.

    The report, however, struck a nerve among Democrats, who are advocating a minimum wage of $10.10 - up from $7.25 now - along with allowing it to rise with inflation, as a winning issue for the party in congressional elections in November.

    The report gave Republicans an avenue to attack this strategy, and they quickly issued statements claiming that the wage hike would “destroy” jobs. The report came just two weeks after a CBO budget analysis found that federal health insurance subsidies under Obama's signature health reform law would contribute to a reduction in workforce participation later this decade, increasing future deficits.

    Obama administration officials were quick to dispute the CBO's employment findings in the minimum wage report, despite another finding more favorable to Democrats - that the wage hike would lift more than a million people out of poverty.

    The rare criticism of the CBO continued on Wednesday, as top White House economic adviser Gene Sperling said the jobs finding was “an area where I'd say we respectfully disagree with the CBO.”

    Sperling told MSNBC's Morning Joe program that many economists have found no negative jobs impact from lifting wages.

    “I think their mistake was not looking at the practical research that was done,” Sperling said of the CBO.

    600 Economists, no numbers

    On Tuesday, House Democratic Leader Nancy Pelosi said the report “contradicts” the findings of “hundreds of top economists, who predict that a maximum wage hike would actually stimulate the economy, raise demand and job growth, and provide help in job creation.”

    In part, she was referring to a letter signed in January by more than 600 economists endorsing the $10.10 minimum wage proposal. These economists, mainly academics, wrote “the weight of evidence” showed 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.”

    While Elmendorf, a Harvard-trained economist, did not directly respond to Pelosi's criticism, he said: “Those economists don't put numbers to their words, so it's hard to know exactly what people meant by 'little to no effect.”'

    He said CBO's findings were consistent with several recent studies that have analyzed a minimum wage increase to $9. This includes a University of Chicago survey of economists in which roughly equal numbers agreed and disagreed that a $9 minimum wage would make it “noticeably harder” for low-skilled workers to find jobs.

    A minimum wage increase to $10.10 would affect more workers and be a larger relative to any other proposed wage increase previously studied.

    He said this “means that employers will face a larger shock in their costs,” and have more incentive to respond by reducing the size of their workforces.

    “A balanced reading of the set of research studies in this area led us to conclude that an increase in the minimum wage would probably have a small negative effect on employment,” said Elmendorf, first appointed to his post by Democratic congressional leaders in 2009 and reappointed in 2011 after Republicans took control of the house.

    Under Elmendorf, who served in the 1990s as an economic adviser to former Democratic president Bill Clinton, the CBO has produced some reports viewed as favorable to Obama, finding in 2010 that the Affordable Care Act would actually reduce deficits over its first decade. It also concluded last year that a Democratic immigration reform bill would cut deficits by $900 billion over 20 years and significantly boost economic growth.

    Elmendorf, who said his personal political views have no bearing on CBO research, ends his current four-year term at the agency in January 2015.

    You May Like

    Former US Envoys Urge Obama to Delay Troop Cuts in Afghanistan

    Keeping troop levels up during conflict with both Taliban and Islamic State is necessary to support Kabul government, they say

    First Lady to Visit Africa to Promote Girls' Education

    Michele Obama will be joined by daughters and actresses Meryl Streep and Freida Pinto

    Video NYSE Analyst: Brexit Will Continue to Place Pressure on Markets

    Despite orderly pricing and execution strategy at the New York Stock Exchange, analyst explains added pressure on world financial markets is likely

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Brexit Vote Plunges Global Markets Into Uncharted Territoryi
    X
    June 24, 2016 9:38 PM
    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Brexit Vote Plunges Global Markets Into Uncharted Territory

    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.
    Video

    Video Tunisian Fishing Town Searches for Jobs, Local Development Solutions

    As the European Union tries to come to grips with its migrant crisis, some newcomers are leaving voluntarily. But those returning to their home countries face an uncertain future.  Five years after Tunisia's revolution, the tiny North African country is struggling with unrest, soaring unemployment and plummeting growth. From the southern Tunisian fishing town of Zarzis, Lisa Bryant takes a look for VOA at a search for local solutions.
    Video

    Video 'American Troops' in Russia Despite Tensions

    Historic battle re-enactment is a niche hobby with a fair number of adherents in Russia where past military victories are played-up by the Kremlin as a show of national strength. But, one group of World War II re-enactors in Moscow has the rare distinction of choosing to play western ally troops. VOA's Daniel Schearf explains.
    Video

    Video Experts: Very Few Killed in US Gun Violence Are Victims of Mass Shootings

    The deadly shooting at a Florida nightclub has reignited the debate in the U.S. over gun control. Although Congress doesn't provide government health agencies funds to study gun violence, public health experts say private research has helped them learn some things about the issue. VOA's Carol Pearson reports.
    Video

    Video Trump Unleashes Broadside Against Clinton to Try to Ease GOP Doubts

    Recent public opinion polls show Republican Donald Trump slipping behind Democrat Hillary Clinton in the presidential election matchup for November. Trump trails her both in fundraising and campaign organization, but he's intensifying his attacks on the former secretary of state. VOA National Correspondent Jim Malone reports.
    Video

    Video Muslim American Mayor Calls for Tolerance

    Syrian-born Mohamed Khairullah describes himself as "an American mayor who happens to be Muslim." As the three-term mayor of Prospect Park, New Jersey, he believes his town of 6,000 is an example of how ethnicity and religious beliefs should not determine a community's leadership. Ramon Taylor has this report from Prospect Park.
    Video

    Video Internal Rifts Over Syria Policy Could Be Headache for Next US President

    With the Obama administration showing little outward enthusiasm for adopting a more robust Syria policy, there is a strong likelihood that the internal discontent expressed by State Department employees will roll over to the next administration. VOA State Department correspondent Pam Dockins reports.
    Video

    Video Senegal to Park Colorful ‘Cars Rapide’ Permanently

    Brightly painted cars rapide are a hallmark of Dakar, offering residents a cheap way to get around the capital city since 1976. But the privately owned minibuses are scheduled to be parked for good in late 2018, as Ricci Shryock reports for VOA.
    Video

    Video Florida Gets $1 Million in Emergency Government Funding for Orlando

    The U.S. government has granted $1 million in emergency funding to the state of Florida to cover the costs linked to the June 12 massacre in Orlando. U.S. Attorney General Loretta Lynch announced the grant Tuesday in Orlando, where she met with survivors of the shooting attack that killed 49 people. Zlatica Hoke reports.
    Video

    Video How to Print Impossible Shapes with Metal

    3-D printing with metals is rapidly becoming more advanced. As printers become more affordable, the industry is partnering with universities to refine processes for manufacturing previously impossible things. A new 3-D printing lab aims to bring the new technology closer to everyday use. VOA's George Putic reports.
    Video

    Video Big Somali Community in Minnesota Observes Muslim Religious Feast

    Ramadan is widely observed in the north central US state of Minnesota, which a large Muslim community calls home. VOA Somali service reporter Mohmud Masadde files this report from Minneapolis, the state's biggest city.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.9036
    JPY
    USD
    102.32
    GBP
    USD
    0.7297
    CAD
    USD
    1.3005
    INR
    USD
    68.004

    Rates may not be current.