Posted on 11/23/2019 5:47:06 AM PST by Kaslin
A $15 minimum wage has already destroyed hundreds of small businesses and many more jobs in cities like New York and San Francisco, and – as interest grows within state and local governments – it now threatens the livelihoods of millions of workers nationwide.
New research by my colleagues and me at the American Consumer Institute examines four major labor market policies – minimum wage hikes, predictive scheduling, mandatory paid leave and joint-employer regulations – and finds these labor regulations will lead to four million fewer jobs. The study estimates that half of these job losses will result as more jurisdictions adopt higher minimum wages.
When labor costs increase, so does the cost of producing goods and providing services. In response, employers may decide to reduce work hours or cut the number of workers, causing output to decrease. Businesses also often increase prices to offset minimum wage hikes, decreasing consumer welfare and eroding families’ purchasing power.
For every job and every dollar of production lost, indirect “multiplier” effects cascade through the economy, magnifying the damage. Employers produce less and hire less, resulting in decreases in employment earnings and leaving the economy with more than one job and more than one dollar lost.
In our analysis, we calculated the economic consequences of setting the minimum wage at $15 in every state, compared to each state’s current minimum. For the 21 states that currently enforce the federal $7.25 per hour minimum wage, a jump to $15 would constitute a more than 100 percent increase. Even Alan Krueger, a prominent liberal economist and adviser to President Obama, cautioned that “a $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences.”
Our results give ample reason for caution. Cumulatively, we conclude that two million jobs would be destroyed from a $15 national minimum wage, relative to employment levels under current law. In Texas, a quarter-million jobs would vanish, while Pennsylvania, Florida, California, and Georgia would also suffer significant declines in low-wage employment. Total national economic output (GDP) would decline by $187 billion, and consumers would lose $138 billion in benefits through higher prices.
These findings are in line with hundreds of studies published over the last several decades, which consistently report that minimum wage hikes reduce employment opportunities for teens and low-skill adults. Last July, the nonpartisan Congressional Budget Office estimated that a $15 national minimum wage could jeopardize up to 3.7 million jobs.
Moreover, the three metrics of economic prosperity we examined -- consumer welfare, output, and employment -- only capture part of the minimum wage’s negative effects, which include reducing training opportunities available to employees, increasing job turnover, and encouraging employers to cut back on fringe benefits. While these unintended consequences are harder to quantify and predict, their impact on low-wage employees should not be dismissed.
In addition, it is becoming increasingly clear that minimum wages are ineffective anti-poverty tools. Most poor families have no workers in the household, and so aren’t positioned to benefit from a wage boost. And among households with a minimum wage worker, nearly 9 in 10 don’t live in poverty, since much of the low-wage labor force is composed of teenagers and young adults living in middle-income households and older second-earners supplementing a partner’s income.
So, while a $15 minimum wage would have sweeping negative effects on the U.S. economy, there is little evidence that it would do much good for those it’s meant to help. In short, American small businesses, consumers, and workers will pay the price.
In the end, the basic laws of economics can’t be negated with political rhetoric or wishful thinking. Americans deserve policymakers who look beyond the hype and carefully consider the numbers. The numbers don’t look good.
The $15.00/hr is not only ushering in robotics; but causing employers to cut staff, reduce hours to part time, causing some workers to loose company insurance and causing some food services to shut down completely.
Some folks work ethic and efforts aren’t even worth $5 an hour. It’s a shame but it’s true.
Vote democrat.
This was so incredibly foreseeable.
Only libtard obliviots could possibly have missed it.
“Only libtard obliviots could possibly have missed it.”
They didn’t miss anything. This is part of the plan. Those who make the $15.00 minimum will still vote rat and those fired because of it will have no choice but to vote rat.
Not surprised.
What is destroying jobs is the money being sucked out of the economy by corruption and people making ten of thousands of dollars a month. In 2018, Median individual income was $39,400.00.
Unless opposing do what is important to win new votes.
Then all the $20 per hour employees will be ticked and want a raise because minimal workers make almost what they do. Companies can’t afford to give raises to great workers because they are overpaying the minimal workers. Sorry but companies can’t raise their prices enough to cover it all and can’t run $22,000,000,000,0000 debts like the government.
The real minimum wage is zero.
The the leftists can blame white supremacy because whites will not pay $20 for a burger. The unemployed can then get on welfare and still be a voting constituency of the left.
Prime rule of the multiverse:
“Everything touched by a progressive turns to Obamastuff.”
This graph shows t raising the min. wage had no effect on youth employment None at all. (1950-2013)
The GOP needs to get behind this push and get this devisive issue off the table.
What’s wrong with making tens of thousands a month?
$15 an hours is a perfect win for the Democrats. It allows them to claim they are champions of the downtrodden and disadvantaged while assuring that millions will lose their jobs or never get their first job, thus assuring permanent dependency on Democrat government handouts.
2. While pay may increase, taxes also increase when a person moves from one tax bracket to another. Also Government benefits can be denied when a worker earns too much money. So a worker making $15 per hour, working fewer hours, taxed more and less government assistance can be worse off.
3. Businesses are less likely to hire entry level employees when their cost exceeds their contribution to the company.
4. What is really killing businesses with these changes is the rate of change. Going from $7.25 to $15.00 in a short time is difficult to pass along to the customers. And it is not just the worker earns a higher pay, governments calculate all types of taxes, unemployment charges and worker comp programs off employees pay. So these raise also.
Some folks work ethic and efforts aren’t even worth $5 an hour.
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Our so-called education system is a big part of the problem. It is indoctrinating students instead of preparing them to be productive citizens.
“...they are overpaying the minimal workers.”
Agreed, the company I worked for, now retired, paid you for what your position was worth to the company. If you didn’t like it, time to find another job.
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