Earlier in the week the Democrats proposed to raise the minimum wage from $7.25 to $10.10 per hour by 2016 and this has apparently set off arguments from both camps about whether or not to raise the wage.
According to the proposal, the new hourly wage would boost 900,000 families above the poverty line and increase the income of 16.5 million workers. The pay increase though could also slash 500,000 jobs, per an analysis conducted by the Congressional Budget Office.
For instance, House Speaker John Boehner, explained, “While helping some, mandating higher wages has real costs, including fewer people working.”
The Republican from Ohio added, “With unemployment Americans’ top concern, our focus should be creating — not destroying — jobs for those who need them most.”
To the contrary, supporters of the proposal defended the increase. Jason Furman, chairman of the Council of Economic Advisers, revealed, “Zero is a perfectly reasonable estimate of the impact of the minimum wage on employment.”
In fact, 600 economists signed a letter to support the hike and according to CNN, in a separate conference call they mentioned the Congressional Budget Office “underestimated the benefits and overestimated the costs.”
We’ll be closely watching to see how this plays out. Later this year the Senate is supposed to vote on the matter.
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