by Richard A. Epstein
February 25, 2014
The White House Council of Economic Advisors recently published a post on its website optimistically declaring, “Congressional Budget Office Report Finds Minimum Wage Lifts Wages for 16.5 Million Workers.” The piece describes a CBO report on a current proposal to increase the minimum wage in three stages from its current level of $7.25 per hour to $10.10 by 2016, after which it would be permanently indexed for inflation—at least until further legislation is enacted. However, upon closer review, the CBO report raises several serious theoretical and practical issues that the CEA’s optimistic headline conceals. Most prominently, the proposed minimum wage increase will go into effect at the same time as Obamacare’s employer mandate. On top of the regulations that Obamacare adds to the labor market, steep minimum wage laws will kill jobs and further slow a weak economic recovery.