Boosting the minimum wage may cost as many as 500,000 people their jobs, said a new report from Congress's financial scorekeeper that diminishes chances for an agreement on one of President Barack Obama's priorities.
The effort by Obama and Senate Democrats to raise the minimum wage to $10.10 an hour already faced opposition in the Republican-led House. Tuesday's report from the Congressional Budget Office provided more fodder for Republicans who have been arguing the proposal would kill jobs.
"This is going to give some angst to Democrats," said former Representative Bart Stupak, a Michigan Democrat.
The report also showed that raising the minimum wage from $7.25 an hour may lift about 900,000 Americans out of poverty, supporting Democrats' arguments in favor of the legislation.
Still, Republicans said the potential job losses outweighed those findings. Brendan Buck, a spokesman for House Speaker John Boehner, said the CBO report "confirms what we've long known."
"With unemployment Americans' top concern, our focus should be creating — not destroying — jobs for those who need them most," Buck said in a statement.
Hank Greenberg
Maurice "Hank" Greenberg, a Republican donor and former chief executive officer of American International Group Inc., said his party was on the wrong side of the issue. A Jan. 8 poll by Quinnipiac University found that 71% of Americans, including 52% of Republicans, support a higher minimum wage.
"The Republicans must not be viewed as the party that killed it," Greenberg said today in a Bloomberg Television interview. "If they do that, they're going to have a tough time in the forthcoming elections. So from a practical point of view I'd hope they'd get it done."
A campaign built around raising the minimum wage can help Democrats win political races in battleground states, said Richard Trumka, president of the AFL-CIO federation of 56 unions with 12.5 million members.
"Raising wages for Americans, for all workers, is the issue of our time and hopefully will be the issue of this election," Trumka said today on a conference call with reporters. "They can yell all they want but this is a winning issue."
Leisure, Hospitality
The change would most affect leisure and hospitality companies, which employed 51% of minimum-wage workers in 2012, according to a Bloomberg Government analysis. At least 50 companies and industry groups are lobbying Congress on the issue, including Yum! Brands Inc., the operator of Kentucky Fried Chicken and Taco Bell restaurants.
Companies, including Darden Restaurants Inc., which owns Red Lobster and Olive Garden, cite a potential minimum wage increase as a risk factor in filings with the U.S. Securities and Exchange Commission. Others, such as Costco Wholesale Corp., back the change, saying it would help reduce turnover and increase productivity.Senate Majority Leader Harry Reid, a Nevada Democrat, plans to bring a minimum wage increase proposal to the Senate floor in March. In a statement, he emphasized a finding in the report that the move would increase pay for 16 million Americans.
"The Koch brothers made over $18 billion in 2013 alone, but middle-class families have watched their incomes stagnate for decades," Reid said, referring to billionaire energy executives Charles and David Koch, supporters of the small-government Tea Party.
1 Percent
"Our economy should work for everyone, not just the top 1%," Reid said.
