Asymptosis: Always Approaching

The Incredible Vanishing Takeaway from the CBO Report on Minimum Wage

I’m surprised that nobody highlights what for me is the key takeaway from that report.

They predict, with a $10.10/indexed increase:

Low-end incomes increase $19 billion.

High-end incomes decline $17 billion.

For a net GDI increase of $2 billion.

Table 1, page 2:

Screen shot 2014-03-10 at 12.18.13 PM

Pie gets bigger, all that rot.

The increase is presumably explained by the last phrase in footnote F to that table:

increases in income generated by higher demand for goods and services.

Cross-posted at Angry Bear.

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One response to “The Incredible Vanishing Takeaway from the CBO Report on Minimum Wage”

  1. David Kowalski Avatar
    David Kowalski

    FDR set the minimum wage originally at 50% of the average wage. It should be somewhere between $11 and $12 an hour using that formula depending on the length of the average work week. These increases ought to have been automatic. Since they weren’t, the minimum wage now in most states is about 1/3 of the average wage, not 1/2.

    The problem we have as an economy is related more to stagnant demand so it’s no surprise that raising the minimum wage would improve the economy. Oddly, the businesses that would pay the most in increase wages (fast food, Wal-Mart) would see the biggest increase in business.