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Topics: CBO

White House: CBO report on minimum wage costing jobs hike sounds like a freshman economics class

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Beltway Confidential,Opinion,White House,Joel Gehrke,CBO,Minimum Wage,Unemployment

White House economist Jason Furman rejected the Congressional Budget Office's prediction that a minimum wage increase will cost 500,000 jobs as out of step with the economic consensus.

"This is not a piece of original research into the impact of the minimum wage on employment," Furman told reporters during a Tuesday afternoon White House call. "It's completely reasonable to think that it would have zero impact on unemployment," he said, citing the "highest quality" studies of the question.

The Congressional Budget Office estimated that increasing the minimum wage would cost about 500,000 jobs, a view that another White House economist said reflects an freshman-level understanding of economics that used to be common among economists but has since been abandoned by most professionals.

"A new burgeoning literature has really pointed out that how much you pay people actually affects how they perform, what they do, and how much they produce," Betsey Stevenson said on the call. "You don't get the loss of employment that that, you know, supply-demand [graph] that you saw on the chalk board if you took introductory economics would have demonstrated."

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