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.
Instead, minimum wage jobs are almost exclusively entry-level positions that serve as an opportunity to gain experience that will lead to higher earnings and better opportunities down the road. In fact, most workers who start out earning the minimum wage receive a raise within a year.
One study of Seattle’s minimum wage increase found that it caused employers to weed out workers with lower skills and experience, and reduced the rate of job entry—meaning fewer young workers could find entry-level jobs to gain experience.
By effectively cutting off the first rung of the career ladder, a $15 minimum wage could stifle young people’s long-term earnings prospects by keeping their careers from getting off the ground.
3. One step closer to a universal basic income.
At $15 an hour, the cost of employing a worker year-round would be upward of $35,000 at the very least. Many workers—particularly younger workers and those without any experience under their belt—simply cannot produce that kind of value.
It’s hard to make the case for a universal basic income in this currently thriving economy, where we have more job openings than workers looking for jobs. But cutting a large share of the population out of work by passing a $15 minimum wage would certainly take us one large step in that direction.
Artificially driving up wages so that millions of people can’t find work and have to rely on the government for a basic income—financed with more federal debt—is not just economically destructive. It’s morally wrong.
If lawmakers want to help workers achieve higher incomes, they should first do no harm and be sure to leave open the doors of entry-level employment that allow workers to gain valuable experience that jumpstarts their careers.
Even before they are old enough to work, policymakers can improve children’s earning potential by giving their parents school choice options. These options particularly help children of lower-wage earners escape poor and failing schools that neglect to provide them the education they need to earn a decent living.
Another way to help raise wages would be to eliminate taxes on capital gains and dividends, which amount to double taxation, since those earnings are already subject to the income tax. This would allow businesses to reinvest that money in technologies that make their workers more productive, and ultimately increase worker earnings.
Finally, lawmakers could reform our unsustainable entitlement programs by better targeting them to those in need. This could result in lower payroll taxes and in turn increase workers’ take-home pay.
Congress has plenty of options to help workers earn higher wages. But lawmakers must do the math and accept the facts: A $15 minimum wage would do more harm than good.
Agree.
Since we seem to be stuck with some type of minimum wage, have a low national minimum wage set by Congress and let each state legislature elect to bump it up (or not) based on the cost of living in their state. A state legislature could also elect a different bump (or none at all) for people living in urban, suburban, or rural areas of their state.
Progressive Socialists continue to attempt to force Congress to make decisions that could destroy our Conservative way of life and move closer to Socialism! Government has no right to be involved in determining what minimum wages should be, as They mostly are buying votes and power by pushing the high wages! Let the businesses determine what the Market can handle.
Just another ploy by the left-wing progressives in their attempt to ‘equalize’ everything. They never understand (or simply ignore) that their socialist actions breed consequences that invariably do more harm than good.
Democrats are smarter than you think! Double the minimum wage (or give the appearance of doing so) and their constituents think they’ve been handed a huge favor. When reality sets in and employers either have to raise prices into the stratosphere or close the doors – and in either case put minimum wage earners out of work – the Democrats can simply say that the employers are xenophobes and racists! Win-win for them!!
We have it in New York and it is coming to my home State of New Jersey. Even with the high cost of living , it has eliminated jobs
“Ya want fries with that?”…Said the ROBOT
I agree that raising the minimum wage–and, in fact having ANY minimum wage—is contrary to free market capitalism. Democrats have fought for this, thinking it will snare in a lot more votes. But when the aftermath turns into layoffs and Recession, the blame always manages to get back to the Republicans, who, as some of us have mentioned time and time again, are not equipped to get out the proper message. The message should include the success of capitalism, low taxes and regulations, more individual freedoms, the American dream! Instead, the dems and their MSM parrots scream income inequality, free health care, hateful Republicans, racist, white supremacy…!
One suggestion offered by the author is aimed at limiting entitlements to those in need, which will lower payroll taxes. But that would only punish those who paid into the system all their working lives, withholding benefits that they were promised and have the right to expect. And should those who planned their retirement well by working hard, saving, and delaying collecting benefits be forced to give up what they worked for in order to fund a segment of the population that spent unwisely, ran up debts, and DIDN’T plan well?
A better approach, I think, begins with raising the age of eligibility, unpopular as it may seem to some.
Another way to hurt the business in America
$20 for a burger, fries, and a soda?!!!Yessir, I have to make it worth my while or I won’t be a career burger flipper.
What a bunch of liberal TRIPE!
In 1978 when I started working, minimum wage was$2.95 an hour. The current minimum wage is too low and should be increased some but to double it would be catastrophic. Those supporting $15 haven’t looked at all sides and they obviously don’t understand basic economics
Democrats always say that minimum wage needs to be raised so folks can earn enough to live on! Well every time the minimum wage goes up, businesses pass on that cost (if they can stay in business) to the consumer so everyone gets hurt!!! I agree with this article that minimum wage hurts entry level and low educated workers but Democrats want that! They need more poor to be dependent on the government in order to buy their votes and blame Republicans for all the crap democrat policy does to us! With the economy going strong and more jobs available, that won’t do for Democrats cuz if working folks do better, they will become more free to make their own choices and Democrats can’t have that! It’s harder to rule over a free people than a poor dependent one (look at any poor country with tyranny). I just wish more Americans understood the manipulation and exploitation Democrats do so they won’t buy into these Democrat policies!!! Lord help America if this gets passed!!!
Democrat’s are Hell-bent on destroying everything that our president has done for this country , if this was to happen ,there would be a huge loss of jobs and welfare would run rampant…and that’s just how they like it …handing out rations to the peon’s
i have noticed over years that Democrats seem to have no clue when it comes to economics.
The Dims know bloody well what will happen if the minimum wage is raised. Newbies just entering the workforce will lose their jobs, they will feel and believe that their ex-employers were to blame, and they will continue to pull the donkey joystick in the hope of punishing the scapegoats.
Could the schools afford to pay $15.00 per hour to support staff that are earning minimum wage in their pre-para positions?
Most lawmakers have never had a job in the private sector and thus should NEVER continue to be re-elected. They have no idea what’s going on for employers but continue to think they know what they should pay.
Our pensions & social security are worth less when the commie-rads (Democrats & Rinos) raise min. wage.
Let the “marketplace” determine minimum wage! Maybe we can afford to live in Mexico if voters don’t wise up.
If you are collecting social security or other fixed income, $15.00 minimum wage means you just toke a pay cut.
Sure by all means, let’s start paying for this communist pipe dream by confiscating and re-distributing in that way Tom Steyer’s , Bill Gates’, Warren Buffet’s, George Soros’, Nancy Pelosi’s, John Kerry’s, Mark Zuckerberg’s, Jeff Bezos’, Alan Bloomberg’s, and the Clinton’s money and after that trial balloon we might have to reasses. Let them put their money and property where their loud mouths are and see how they would embrace it. They would go from the party of NO to the party of NOOOOOOOOOO in 0.0001 seconds!
I totally agree that the minimum wage should not be increased. The idea that people who make the minimum need more money is up for debate. The majority of those people are not the ”bread winners” for their home and family. There are too many ways people can improve their status in the local colleges and training schools. A step up means someone needs to show their enthusiasm to improve. We can no longer be a ”free card” country. If we do, we will be cutting our own democratic way of living. If you want to earn more, than go for it by increasing your education or showing your employer that you are worthy of being promoted.
THIS IS the stupidest country on the face of the earth! We can see examples such as this EVERY single day. We are racing toward third world economy status as hard as we can go! We continue to give away even while we cannot support things that need it. SERIOUSLY, we are heading full throttle toward anarchy!
Using democratic illogic, we should then just raise the minimum wage to $1,000,000 and everyone would become millionaires! This is not unlike their idea of making everything legal which would reduce the crime rate to 0%!
So, if the min wage is increased (read: doubled) to $15.hr what will the Retirees do? Company pensions are fixed at the time you retire based upon what you paid in or what the company allocated to your retirement account when you were an active employee. Inflation does not increase the benefit amount. Social Security does get an increase from time to time but usually the cost of the medicare premiums and the medicare supplement premiums and the Part D, prescription drug insurance premiums increase each year as well. So, the retiree has only one choice: Eat out less frequently, ship packages (or order things on line where they will charge you for the shipping) less frequently, purchase any kind of goods or services less frequently. Tell me, how does this help the economy? You think retirees are not a significant part of the economy? I recently read an article that says because of the low birthrate in the U.S., in the next 20 years the number of retirees will exceed the number of 18-25 yr. old workers.
Why not call for a minimum wage that is a “living wage”. What’s the difference between a living wage and a “decent wage”? The liberal Democrats really don’t care about what the workers get in their paychecks, they only care about looking like the party of the working class.
Let’s face facts, this controversy is all about the value of the work being done. If a person provides real value to his employer, that employer will want to keep him as his employee. Raises, increased benefits and promotions help to keep such workers. The workers who choose to do just enough to “get by” do not provide the value that the employer needs to grow, or even stay in business.
Pssst! Companies are not in business to provide jobs. Companies seek enough earnings on the services, or products so they can delight the customers, and thereby make a return on the investment that their stockholders made. If a corporation is not making enough profit, the stockholder will sell that stock and invest in a business that does make the required profit.
Bottom line? The higher the government pushes the minimum wages, the sooner the businesses will replace the workers will robots. After all, only the high initial costs of automation keeps the employers from letting the low paid workers go. We’ve all seen videos of car assembly lines populated by robot assemblers. How difficult would it be to make a robot that can make a burger and fries to order?
Solution? Young people need to get a realistic higher education, or they should acquire the skills needed in the trade industries. Some of the trade skills yield more income than a college degree. Thinking that certain political candidates can provide an easy way through life is not sound thinking.
Is there anyway we can shut down the entire government? I think we all would be better off.
The facts are easy enough to discover in the discussion about a minimum wage and businesses are taking note. In the past year, McDonalds has rolled out self-serve kiosks in their stores and the other fast food chains are not far behind. Raise the minimum wage to $ 15/hour and the age of robotics will be going full force in the restaurant industry. We will soon have robotic cars and trucks. So, for all of the socialists who want to equalize everyone’s paycheck, just where do you think the money will come from to pay the costs for all this unemployment that was needlessly created. The businesses that couldn’t afford robots will be out of business because their operating costs have been forced beyond their ability to achieve the revenue to cover them. Pretty easy to say raise the minimum wage to $ 15/hour, why not $ 100/hour. How many additional people on welfare and food stamps is acceptable. Or, is the giant goal to make more people dependent on a government handout so they will vote for more socialism!
The DNC’ommunists are again trying to buy votes. A minimum wage of $15/hour / $30000/yr. How much are you getting? Do you have a business? Well go to McDonalds or Walmart or any other low wage type place and pay attention: do these people deserve more than I do for having to actually doing something? The first place to look is a MC’D’s drive up window. This will also put places out of business where these people can work. Grow up and get a real job and, ya, at 14 I did something similar in a restaurant for 50 cents an hour? That has an effect on your attitude to improve yourself.
When a solider, sailor, airman, etc., who puts his/her life on the line in places like Iran, Iraq, Afghanistan, Korea etc., etc. gets minimum wage, then I may consider backing the minimum wage for McDonald’s. As has been said time and again, these jobs are for teens, maybe some others, needing a job and work experience for down the line. These are not lifetime jobs.
Your comment near the end of the article that reads: “Artificially driving up wages so that millions of people can’t find work and have to rely on the government for a basic income—financed with more federal debt—is not just economically destructive. It’s morally wrong,” is however exactly what the liberals in Congress want. They want people depending on the government for everything, so they will keep getting re-elected.
This is just another attempt at wealth redistribution by the libs.
I would be in favor of a bill that would eliminate the minimum wage altogether. Increasing the minimum wage also increases inflation , decreases the amount of jobs and hurts businesses, especially small businesses.
The disastrous consequences cited in this article are exactly the result that the democratic socialist’s want. They want 7 million jobs lost. That would be 7 million more people on the government gravy train that the democrats can force to vote for them or risk losing those benefits. The consequences listed are perfect for a socialistic society where only the elite live prosperously.
Fifteen dollars an hour is about the right wage for most liberal democrats including the political elete.I will not mention names,but a flight with a broom is cheaper than a taxpayer funded flight.
This would put businesses out of business. I know the people that work in these types of jobs need a raise, but it would hurt the economy because these business would close. Try to get an education and then you could get a different job.
Pity the seniors and others on fixed income such as social security, disability, and,fixed pensions. There will be much pain due to increased prices to cover the increased expense. Of course other taxes are tied to wages as well (L&I, SS, Medicare, UI to name a few) so the total cost to businesses will be much higher than whatever increased wage they pay.
The big thing I have noticed lately, is the increase in what I call, “self-serve” kiosks, where you have the computer device on your table and you program in your own order, which is delivered by one of the cook staff in the back. So, waitresses lose their jobs because restaurants have to cut the overhead of the higher beginning wage earners.
1. The idea behind the increased wage is, note the 7 million number, more people forced on to the welfare rolls. Like in poor countries run by dictators, control the food and you control the people.
2. By causing less young workers to have employment, their only alternative will be to go to college, since the government will be letting them do that for free.
I never hear any consideration for retirees who are on fixed incomes. Will Social Security double the “benefits” that I have mand-atorialy paid for for 53 years? Or will we suddenly be the new ‘poor’. Maybe a 3% COLA…….MAYBE but I doubt it. Vote Conservative……even if.it means dumping some RINOS!
Socialism is a nice word for communism!
If the “dimocrats” aren’t stopped they are going to turn the USA into a “socialist paradise”. Those of us who know better, need to
stand up and resist !!!! Americans who love this country and all that it has stood for need to band together and get involved NOW
to put a halt to the craziness that has seized the “hard turn to the Left dimocrats”. Think of the horse manure we are going to endure over the next two years with Pelosi and company controlling the congress. RESIST…RESIST… RESIST !!!!!
It would be a disaster to raise the minimum wage again because the last one led to layoffs because some businesses can not afford it because it may make them have to close their doors of business. That is not a healthy situation in our communities because it is better to have a job with lower pay than no job at all because the employers can not afford to pay more wages than income from their business!
Instead of raising the minimum wage put all those at entry level put them in a skills learning and Improvement program so they can qualify for higher earnings based on their contribution to the economy
What about people living on social security they get about 2/3 of what mininum wage workers would make at $15 an hour figuring a 40 hour week. The retail increases, would prohibit life itself.
Totally agree.
New York State has been raising the minimum wage to $15 in the city (NYC) and up to $12.75 in rural NYS. Fast food places are installing kiosks to take the orders, thus eliminating the counter workers. Price increases are making the fast food joints a luxury for fast food workers to bring their family to eat there. Hospitals are placing people on call thus eliminating hours paid. Hours cut from 30 to 20 hours eliminates one third of wages, taxes and buying power. Saving money for the employers but costing the employee money. It also makes the worker look for another job to make ends meet. Now the employee is juggling two jobs, scheduling problems and call ins are difficult causing more employee problems. More and More I am hearing problems with reduced hours causing problems not only to workers but employers too. Just another reason why many are leaving the state in droves.
Yeah, raise the minimum wage to $15- and watch groceries, gas, rent, and utilities triple. So double the wage and subtract the extra rent and other costs of living necessities and the poor get poorer and the Democrat’s get accolades for championing the poor when in actuallity they’re the ones causing the harm… Yet people do not take the time, nor expend the energy to look at the correlation to the cause…
I agree with above. The government assistance programs need to be managed by each state. Reduce the number of employees for the federal government.
What better way to destroy a robust economy and expand the number of folks who depend on the government for handouts. People who depend on the government for survival tend to vote for Democrats which is their ultimate goal: Destroying individual initiative, drive and liberty and gain power and reelection for themselves.
I as a small business owner. Don’t see anyway to pay 15 per hour to every employee That means prolly closing my doors
Makes a great deal of sense. I am a former employer who had need for entery level workers. Those with good work skills moved up the wage scale quickly.