Washington, D.C. – Today the Employment Policies Institute (EPI) released a statement in response to the Congressional Budget Office’s new report that estimates raising the minimum wage to $10.10 per hour will result in 500,000 fewer entry-level jobs.
Michael Saltsman, EPI’s research director, released the following statement in response:
The new Congressional Budget Office (CBO) report should come as a warning to President Obama and allied legislators who are pushing for an increase to $10.10. The CBO has confirmed what the vast majority of careful, peer-reviewed economic research has also shown: Raising the minimum wage will reduce job opportunities for the least-skilled, at a time when unemployment for young adults has been above 20 percent for more than five years.
The CBO’s estimate of lost jobs is broadly consistent with EPI’s earlier estimates, which found that at least 360,000 jobs—and as many as one million—would be lost from a $10.10 minimum wage increase.
Raising the federal minimum wage by 40 percent is a blunt instrument to fix the very complicated issue of poverty in America. Nearly 60 percent of the working-age poor don’t have a job and wouldn’t be affected by a raise. Of those who would receive a raise, a forthcoming study from Cornell and San Diego State University economists find just 13 percent live in poor families.
Instead of creating more barriers to entry-level employment, President Obama and other proponents of a higher minimum wage should instead focus on policies that help create jobs.
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