In it, but not of it. TPM DC

White House Defends Minimum Wage Increase


The official said Boehner's hypothesis is based on the theory that when the cost of employment goes up, business want to hire fewer people. But that's only part of what happens, the official said, arguing that studies find that it is offset by reduced turnover, more motivated workers and a more productive workforce. The official said studies find that the second effect tends to be about the same as the first effect when it comes to employment.

The official also cited a statistic by the liberal Economic Policy Institute that raising the minimum wage would give some 20 million American workers a raise, which would substantially improve labor markets and boost consumer demand. EPI, which has strong ties to the labor movement, has been pushing for an increase in the minimum wage.

The administration official cited three research papers as the best, most recent studies that inform the White House's views: a 2010 paper in the Review of Economics and Statistics, a 2012 paper in the British Journal of Industrial Relations, and a 2011 paper in Industrial Relations.

To back up Boehner's argument, spokesman Michael Steel pointed TPM to a 2012 paper by the libertarian Cato Institute, a 2009 paper by the conservative Heritage Foundation, and two opinion pieces published last year by Michael Saltsman, a researcher for the industry-backed Employment Policies Institute: a letter published in the New York Times and an op-ed for the New Jersey Daily Record. Separately, Steel also cited a statement by the National Federation of Independent Business, a Republican-aligned group, and an article in Forbes by NFIB's chief economist William Dunkelberg.

Obama explained his objective on Tuesday night: "Tonight, let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour."

Slamming the door on a minimum wage increase may be bad politics for the GOP, argues longtime Republican strategist Ed Rogers.

"I worry that being too anti minimum wage plays to the Republican negative stereotype," Rogers told TPM in an email. "The commonsensical appeal of there being a minimum wage and having occasional raises is powerful. Plus I think we could argue for some good policy, like a youth exception, if we did something other than just slammed the door."