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.
TEXT SIZE - +
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

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

John the XXIII and John Paul II will be made saints in a ceremony at St. Peter’s Square on April 27 More

Thailand Reacts to Plots Targeting Israelis

Authorities hope arrest of two Lebanese suspects will disrupt plot to attack young Israeli tourists More

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

'Once Upon a Forest' takes viewers deep into heart of tropical rainforest More

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.
Pope Francis Hopes Dual Canonizations Will Reconcile Churchi
|| 0:00:00
...
 
🔇
X
Jerome Socolovsky
April 22, 2014 4:14 PM
On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Robotic Mission Kicks Up Lunar Dust

A robotic mission to the moon was deliberately crashed onto the lunar surface late last week, but not before scientists had collected data gathered by the spacecraft which was designed to self-destruct. VOA's Rosanne Skirble reports on the preliminary findings of the craft, called LADEE - an acronym for Lunar Atmosphere and Dust Environment Explorer.
Video

Video Boko Haram Claims Responsibility for Bombing in Nigerian Capital

The Nigerian militant group known as Boko Haram has claimed responsibility for a bombing in the capital on April 14th that killed 75 people. In the video message, Abubakar Shekau, the man who says he ordered the bombing, says nothing about the mass abduction of more than 100 teenage girls, most of whom are still missing. Heather Murdock has more for VOA from Abuja.
Video

Video Ukraine Developments Hang Over Obama Trip to Asia

President Barack Obama's trip to Asia this week comes as concerns over Beijing's territorial ambitions are growing in the region. Those concerns have been compounded by Russia's recent actions in Ukraine and the possibility that Chinese strategists might be looking to Crimea as a model for its territorial disputes with its neighbors. VOA's Bill Ide has more from Beijing.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.