The Congressional Budget Office (CBO) is known for careful, factual studies. However the CBO is a creature of Congress and not immune to political influence. Sometimes CBO reports that displease Congress are withdrawn. CBO reports are intended to be educational; they deserve careful study. When politicians cherry-pick these reports, plucking something out of context that seems to their liking, they misuse this valuable resource.
The CBO released a report, dated February 18, 2014, titled “The Effects of a Minimum-Wage Increase on Employment and Family Income.” Politicians immediately seized on information from this report that conforms with their prejudices. Brendan Buck, a spokesman for Speaker John Boehner reportedly said “This report confirms what we’ve long known: while helping some, mandating higher wages has real costs, including fewer people working.”
Here is the paragraph cited:
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 (see the table below). 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.
This CBO report contains other conclusions that show benefits from raising the minimum wage. It is misleading for Speaker Boehner to cite only one conclusion that reflects what he has long known. Those interested in arguments for and against raising the minimum wage should read the report themselves.
The CBO report has 43 pages. It appears to be carefully done and well worth study. It can’t be summarized with one quote taken out of context. Politicians will do that; the public should be wary.
He hasn’t yet, but watch for Tom Reed to cite this report to justify his opposition to raising the minimum wage. He is all but certain to do that. For another view on the minimum wage question, see the report of Senator Tom Harkin cited below.
© William Hungerford – February 2014