Against It Before They Were For It: The White House and $10.10

After the nonpartisan Congressional Budget Office (CBO) released a report estimating that a $10.10 minimum wage would eliminate as many as one million jobs, the White House scrambled to discredit it. In a lengthy press statement, the administration argued that the CBO’s conclusions did not “reflect the current consensus view of economists.” In a follow-up phone call with reporters, Jason Furman – chair of the White House Council of Economic Advisers – said that “zero is a perfectly reasonable estimate of the impact of the minimum wage on employment.”

Last year, however, the White House was singing a very different tune on $10.10.

According to the Washington Post, the White House initially “rejected a figure so high, worried that it could destroy jobs…” Seth Harris, who was acting Labor Secretary at the time, explained the White House’s thinking further: “We wanted to ensure it was a moderate increase in the minimum wage so we didn’t spark any negative effects on employment.”

Read that again: Just one year ago, the White House was concerned that a $10.10 minimum wage would create “negative effects on employment.” Today, it argues (contrary to the CBO) that “zero” effect from $10.10 is a reasonable estimate.

What’s changed in the last year? Certainly the labor market for directly-affected employees such as teens has not improved much. The unemployment rate for this group is still lingering above 20 percent. Rather, what’s changed is the political environment: 2014 is an election year, and both the Associated Press and The New York Times have reported that support for a higher minimum wage is a key component of Democrats’ election-year strategy. With unions and the party’s liberal base rallying around the $10.10 figure, it would be very difficult for the President to explain his concern about a minimum wage set so high.

It may be politically expedient. But it comes at a cost for the least-skilled employees–a fact that the White House was well aware of last year.