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View Diary: The CBO Whiffs on the Minimum Wage (12 comments)

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  •  They seem to be really scuffling of late (1+ / 0-)
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    what with their projection of ObamaCare reducing the labor force by 2.4 million  (or whatever the exact number is) and now this.

    •  What was wrong with that CBO projection? (1+ / 0-)
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      It's been explained pretty thoroughly on DK that that "reduction" is a good thing for the labor force.


      •  What was not explained is why, if demand (0+ / 0-)

        still exists for the services or products emanating from the jobs vacated by people who no longer needed them, why others wouldn't step in and fill the jobs.

        Somebody said because the country would be at "full employment" so that (obviously) would not be possible, but the CBO themselves projected continuing high unemployment during the time frame in question.

        So replacement workers will be available.  Making it quite the conundrum why they wouldn't be hired.  

        •  It's a reduction of "labor supply". (0+ / 0-)

          People will be hired to fill those jobs.  The total number of Americans in the work force, either working or looking for work, will be reduced, not the number of filled jobs.

          It's confusing, because almost of the news we hear about the job market is about the labor demand side, how many jobs are there, how many jobs are being created, how many are being lost.

          This isn't about the labor demand side, it's about supply, how many workers are available to fill the existing jobs.  That supply is expected to go down.  And a drop in supply has much the same affect as an increase in demand:  unemployment drops, wages go up.  So its a good thing.


          •  Well OK, but that's not at all how (0+ / 0-)

            it was presented (either here or in regular media outlets).

            for example from CBS

            The part of the CBO's analysis that has drawn the most attention is the agency's revised forecasts concerning the ACA's impact on the labor market. Specifically one sentence: "The reduction in CBO's projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024."

             Taken out of context, that sentence could be read to say the ACA will be responsible for a loss of 2.5 million jobs over the next decade. However, the report's previous paragraph states, "The ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor . . ..

            That seems to be very clear - as re-iterated twice - that the total amount of work done will be going down (albeit because people will voluntarily leave their jobs, so no harm done it would seem).

            So yes, I agree with you that the supply of labor will be reduced.

            But you are also saying that people will be hired to fill those jobs.  That is not consistent at all with the CBO projections that the net amount of work will go down.   Because you know, if people were hired to fill the jobs vacated by those opting out of the workforce, the amount of work would not go down.    

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