Yellen backs CBO on minimum wage findings
Federal Reserve Chairwoman Janet Yellen on Thursday backed an analysis by the Congressional Budget Office on the economic impact of a minimum wage increase, which has been blasted by the White House.
The CBO found earlier this month that raising the wage to $10.10 could cost 500,000 jobs by 2016. The White House blasted the finding as outside the mainstream economic consensus.
The central bank head told the Senate Banking Committee that the CBO “is as qualified as anyone” to determine what a minimum wage increase would do to the economy.
“I wouldn’t argue with their assessment,” Yellen said. “They’re good at this kind of evaluation.”
She added that “almost all economists” believe that a minimum wage boost would have some negative impact on the number of jobs, but the scale of that impact can be debated.
However, she also noted that the increase would have the direct positive impact by increasing the wages of a large number of workers.
The CBO found that 900,000 people would be lifted out of poverty by the proposal and 16.5 million workers would see their incomes increase.
Democrats say the CBO report is a net positive and that they are confident its negative employment finding can be discredited.
On Wednesday, House Democrats launched a discharge petition meant to force GOP leaders to hold a vote on the minimum wage bill. As of Thursday it had 156 signatures, all Democrats.
At least 19 Republicans will have to buck leaders for the petition to succeed.
Senate Majority Leader Harry Reid (D-Nev.) has said action on a bill will not come this month as Democrats try to build support for it and to clear a backlog of other work.