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

    Vietnam Urges US to Lift Lethal Weapons Ban Amid S. China Sea Tensions

    US president’s upcoming visit to Vietnam underscores strength of relationship, and lifting embargo would reflect that trust, ambassador says

    Are US Schools Turning a Blind Eye to Radical Qatari Preachers?

    Parade of radical Islamist clerics using mosque at Qatar’s Education City draws mounting criticism for American universities that maintain satellite branches there

    Why Islamic State Is Down But Not Out

    Despite loss of territory, group’s ferocious attacks over past three months seen as testimony to its continued durability and resourcefulness

    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.
    Displaced By War, Syrian Artist Finds Inspiration Abroadi
    X
    May 02, 2016 1:36 PM
    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video Kurdish Football Team Helps War-Torn City Cope

    With the conflict still raging across much of Turkey’s predominantly Kurdish southeast, between the rebel PKK and the Turkish state, many Kurds are trying to escape the turmoil by focusing on the success of their football team Amedspor in Diyarbakir. The club is increasingly becoming a symbol for Kurds, not only in Diyarbakir but beyond. Dorian Jones reports from southeast Turkey.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8700
    JPY
    USD
    106.56
    GBP
    USD
    0.6808
    CAD
    USD
    1.2518
    INR
    USD
    66.404

    Rates may not be current.