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.
One point not mentioned is it does NOT encourage the employee to seek an /or get training or schooling for jobs that would offer better wages. It allows an employee to get needed raises not on his/hers effort but rely on others like a government mandating higher costs to employers.
I believe employers who hire at low wages should also have programs to raise the responsibly or duties, so the employee can advance to and truly earning higher wages. We must acknowledge the cost of living is ever raising and requires higher and higher wages.
Some on else should not give unearned higher wages for political purposes as now is being done by many democrats [many want to rule as president]
Enjoyed the article, well written, and researched .
The minimum wage should be raised but there should be a tier minimum wage structure put in place. Tier #1-$10.00 entry level 0 – 2 yrs experience, tier #2 – $12.00 – 3- 5 years experience and tier #3 – $15.00 – 6 yrs -plus.
I am against a flat $15.00 minimum wage for those with no experience.
Well, I think we should ‘reduce’ some minimum wages in some places where we don’t get what we pay for. Lets start with the Congress. They are robbing the taxpayers with ineptness and plain stupidity. “Hey, lets get an Air Force jet and fly our families around the world so they can’t find us to do our jobs. Won’t that be fun” say the leftist political hookers from CA!
Let the local markets determine wages. The government is the last place you want that control given too. They can’t even run the government without overspending on everything and never addressing the real issues. As for the Left-Wing Progressive Socialists, they just show you how much hot air is between their ears and that this area is lacking any common sense or knowledge of what is really needed. Just give me, give me,… Take, take, take,…
What ever happened to the old saying, “Laws of supply and demand?” This change in minimum wage would all but remove this law from our way of life. Does anyone who promotes these progressive agendas have anything left in their “Logical tank? Its seems that most all that they push lacks any element of common sense. Just last week the State of New York passed a change in the abortion, ‘death” law making it legal to kill a baby in the womb right up until the moment the little one is birthed. They were celebrating this amendment to the law even up to the Governor’s position. Then the State of Vermont followed with the same change. How far will God allow us to go before He says ‘Enough is enough?” Progressive used to be a positive word, but that too has changed to a negative terminology. God help us!!!
I had a small grocery store several years ago. If the minimum wage had been upped at that time, I would not have been able to train a mentally slow young man how to stock groceries properly – would not have been able to pay him. Government needs to keep their noses out of this issue. Where I live now could not support a $15 minimum wage. What business there is would mostly likely close, would surely lay off if they had enough employees to do so, and would decimate the town.
This sound like how to start socialism 101.
1. A $15.00 an hour wage is impossible for any small business to meet. I agree with all the reasons stated above, also consider the impact on the working families. Everything needed to provide a home, transportation, clothing, food, medical, you name it, even school supplies and please keep in mind that the bulk of school resources are purchased by the teachers, not the school districts or the government. Every item we purchase will go up to enable those employers to pay those wages. How many more people will be forced to go on public assistance because they no longer have a job?
2. All of those people who have jobs that pay $15.00 an hour now or slightly higher are going to want raises and rightly so. Why would a person who has been in the workforce for some time settle for earning the same thing as n entry-level employment.
3. The government will collect more taxes which will have to go to paying those on welfare and unemployment. Or they will continue to swander our taxes on programs that have no value to the quality of life for the American people. Will any of the additional taxes go to shoring up the Social Security System? We can all thank Pres Ford for stating to strip us of the SS we have spent a lifetime earning notice said earned not are entitled to.
4. Absolutely no politication or member of the Washington or state political machine get a raise and freeze them where they are.
If A new worker gets a 15$ an hour raise, then my hard work and experience of 10 years on the job wants 25/30$ Raise. My employer would lay me off to hire another minimum wage earner. Quality of the service type job would go down, possibly causing the business to fail and people to loose jobs and go on unemployment. What other ramifications would result
You forgot inflation. The money to pay them will make everything cost more. The wealthy will still be wealthy, the poor will gain nothing as their increased wages will be eaten with higher costs. The middle class who have large saving in 401ks will be screwed as the value of their nest egg shrinks. You cannot make wealth out of thin air.
There’s especially two things that the Dems need to keep their hands off of 1st: minimum wage for
workers!
2nd: voting themselves
pay raises!
Unfortunately people have no clue as to what increasing minimum wages at such a radical rate does to businesses, especially small businesses. I know from first hand that in the State of Washington where minimum wage increases each year (we are at $12.50) has had on us and it’s fiscal impact on everyone. Sure it sounds good in theory but the reality is that the dollar buys less and less leaving the individual in the same place or worse then they were when wages were reasonable. High minimum wages culminated with price increases for all services and all commodities are inevitable in order for businesses to absorb the additional cost in payroll. The impact on the small business owner is affected at a greater magnitude as they do not have big business buying power as our large volume businesses do, and therefore cannot absorb the cost. Increasing cost to the consumer is not practical, as they would have to price themselves out of the market to stay afloat. Overall effect, small essential businesses to small communities are forced to close their doors. We need to recognize that Small businesses employ the majority of entry level jobs, with them closing their doors where will these individuals find jobs that will sustain them and their families.
January 1, California’s minimum wage went up $1.00 per hour to $12.00 per hour (on our way to $15.00). Did I as an employer get a dollar’s more productivity from my minimum wage employees? NO, just complaining from the employees up the “food chain” who expected an equivalent raise “just because”. I never give a raise to an employee when they come to me and say they “need a raise”. I ask them to come to me with reasons they have earned a raise. If they stay, the choice is theirs.
Can’t help but wonder if this has more to do with demolishing Trump’s economic boost and record of lowest unemployed in years. It will boost, again, number applying for food stamps, etc., all part of a nation of people dependent on gov’t. That equals socialism, then communism, then globalism and one-world order. Gotta say they are determined. WE THE PEOPLE need to FIGHT BACK any and all ways possible.
In San Diego workers got 15 then learned they no longer could get certain welfare programs because they earned to much so they protested for fewer hours
Advocates for increasing the minimum wage to $15 per hour across the U.S. are disingenuous. They base the argument for increasing the minimum wage on the idea of a “living wage.” Note, how these advocates never quantify a “living wage” in terms of actually providing the cost of housing, food, transportation, etc. Instead they lead the listener to believe that $15 per hour provides a “living wage.” Furthermore, these advocates avoid expressing that amount as an annual salary, which is $31,200 ($15 times 2080 hours; the number of work hours in a year) and gives a clearer understanding of what one makes. Add to this argument the cost of living, which is not uniform across the U.S. and advocates also avoid discussing. Combine the these and then ask the question “where can a single person provide the essentials of living (e.g., housing, food, transportation, etc.) on $31,200 per year?” Not in major cities like D.C., NYC, LA, etc. Just a guess, but a “living wage” in these cities would be closer to $60,000 per year, if not more. However, that’s $29 per hour. Yet the majority of advocates don’t call for raising the minimum wage to this level. I believe they understand that raising to $29 per hour would kill the economy, even though they tell us raising the minimum wage has no impact to the economy.
People don’t know how to work for so much pay. There speed gets alot slower with more money. In New York they are getting paid very well for working at McDonalds and they are very slow. 20 years ago I worked for Burger King and was able to make sandwiches during lunch rush by myself and we made anywhere from 1500 to 2000 dollars just from 6 am to 2 pm. I only made 6.30 and hour. My conclusion is that i guess that the more money you make the lazier or slower you get. Don’t figure.
want more depends on government warfare this would close most if not all mom and pop business that employees . which give fewer control over places the government by and taxes thru fees and regulations tariffs . which falls back to those seek freedom for United Statas of America
I have see over the pass years that the push by those in our Government for a Socialists Government. People need to study history on World War II. They would understand that everything that is being pushing is putting our Country on to the same path. When the people no longer work for them selves but for the Government. When this comes to pass it will be to late to turn back. So to raise the minimum wage is just another step to this out come. We need to put a stop to this step. We need to take steps to gain back what freedoms we have loss already. We need to get rid over those in the Government which have made their living off of the people and doing nothing for the people but taking monies from the people to line their pockets. We the people need force term limits on those who hold offices both in the house and senate. We need to get back to our constitution which says for the people, by the people and of the people.
As a business owner, I’d call a meeting of everyone, then split them down the middle. “You guys on this side, you’re good! You guys on the other side, you’re fired!. Have a nice day, and thank your local liberal (Democrat) politician for forcing my hand with their stupid laws dictating how I have to run this business which employs–or used to employ–you.”
Some fast food eateries already have order/pay kiosks. Your receipt has a number on it. When your number is called, you collect your order. Soon there will be robotic burger and fry cooker/preparers (as seen on 60 Minutes). There may not even be a live person to hand you your order, just take it from a collection area when your number is called. The only person in the building will be the manager who is an IT technician who restocks food prep and reprograms the computers when they need a reboot. Who needs minimum wage workers…..
“reform our unsustainable entitlement programs ”
To what programs do you refer? It has become commonplace to use the word “entitlement “ in reference to welfare. True entitlement programs were never intended to serve the needy. Changing a true entitlement program (i.e. Social Security) is tantamount to “bait and switch” and is totally unacceptable. Increasing minimum-wage effectively reduces the buying power of those on a fixed income ( i.e. social security). Does anyone think that Social Security is going to double to offset this negative consequence of increasing minimum-wage?
Its simple math that the Dems either can’t understand or more likely are ignoring in another entitlement ploy. If I’m an employer who can afford to pay a combined $25 an hour for additional help, I can hire 3 people for the current $7 minimum wage. If that minimum goes to $15 then I can only afford to add one employee. Bye bye to the other two.
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.
I as a small business owner. Don’t see anyway to pay 15 per hour to every employee That means prolly closing my doors
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 agree with above. The government assistance programs need to be managed by each state. Reduce the number of employees for the federal government.
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…
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.
Totally agree.
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.
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
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!
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 !!!!!
Socialism is a nice word for communism!
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!
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.
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.
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.
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.
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.
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.
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.
This is just another attempt at wealth redistribution by the libs.
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.
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.
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.
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!
Is there anyway we can shut down the entire government? I think we all would be better off.
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.