House Democrats are looking to double the minimum wage, with little eye to the consequences.
Led by Virginia Democrat Bobby Scott, House Democrats introduced the Raise the Wage Act, which would more than double the federal minimum wage from $7.25 to $15 per hour by the year 2024.
Democratic lawmakers have long been in favor of a higher minimum wage, but few have gone so far as to call for doubling it. Until now.
Despite caution from some liberal economists who warn that a $15 minimum wage would “risk undesirable and unintended consequences” and disproportionately hurt younger and less-educated workers, as well as immigrants, more than 180 Democratic members signed on to support the bill.
But the result would be quite different from what they expect. While a $15 minimum wage would raise wages for some workers, it would have disastrous consequences for many others.
Here are three consequences that these advocates need to consider.
1. Millions of lost jobs.
A Heritage Foundation analysis from 2016 estimated that a $15 federal minimum wage would wipe out 7 million jobs. Hardest hit would be workers, businesses, and economies in areas with low costs of living.
Liberal activists demand a “living wage,” but the truth is that only a tiny handful of hourly wage workers make the minimum wage or less (4 percent), according to the Employment Policies Institute. On the contrary, a whopping 44 percent of hourly workers currently earn at or below the proposed $15 minimum wage.
Now consider what the $15 minimum wage would do.
For a restaurant that employs 10 minimum wage workers, a $15 minimum wage hike would cost them about $170,000 per year. If the restaurant currently earns profit margins of 5 percent, it would have to increase sales by $3.5 million per year, or an extra $67,000 every week.
But that is not realistic. The likely scenario is that they’ll either have to cut working hours or fire some workers altogether. Either way, most people are worse off than before.
This pattern has played out countless times already. FacesOf15.com documents more than 150 businesses that have had to lay off workers, reduce hours, increase prices, or shut their doors altogether due to minimum wage hikes.
In fact, voters in Washington, D.C., passed a minimum wage hike for restaurant workers last year, but the City Council blocked the measure after waiters and waitresses came out in droves to oppose it. Their initiative was known as “Save Our Tips.”
2. Eliminating opportunities for upward advancement.
Fight for $15 advocates treat minimum wage jobs as if they’re lifetime positions. But they’re not. The vast majority of these jobs are not filled by single mothers struggling to make ends meet—the minimum wage cannot support a family, and isn’t designed to.
Read the full story from The Daily Signal
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