Courtesy of Mish.
A new CBO study shows ObamaCare Magnifies Minimum-Wage Job Losses.
The Congressional Budget Office weighed in on President Obama’s proposed $10.10-an-hour minimum wage, saying it could lead to job losses that range from “very slight” to “1 million.”
But in a footnote, the nonpartisan number cruncher explained that near-term job loss may be higher because its analysis didn’t factor in the new ObamaCare costs imposed on employers.
“At the same time that the proposed increases in the minimum wage would take effect, the Affordable Care Act’s requirement that many employers provide health insurance (or pay a penalty if they do not) will impose an additional cost on employers for some low-wage workers who do not currently have employment-based health insurance,” the CBO said.
Over time, the CBO expects that the cost of complying with ObamaCare’s employer mandate “will ultimately be borne by (low-wage) workers through lower wages.”
Analysts on the left lashed out at the CBO for its analysis that “flies in the face of overwhelming empirical evidence,” according to Christine Owens of the National Employment Law Project.
Yet there has been little study of minimum-wage hikes of the scale proposed (39% from the current $7.25 an hour).
Proponents of a large minimum-wage hike also have ignored its potential interaction with ObamaCare’s employer mandate, which the CBO suggested may result in a bigger near-term job loss than a wage hike by itself.
Loss of 500,000 Jobs
Let’s go straight to the CBO Report on Minimum Wages to get some numbers.
Effects of the $10.10 Option on Employment and Income. Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects. As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers
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