Congressional Budget Office Reveals the True Consequences of a $15 Minimum Wage
The left is obsessed with constantly raising the minimum wage, but their plans to double the federal number could send over a million Americans into the unemployment line.
That’s the grim conclusion of the non-partisan Congressional Budget Office, which released a detailed report on Monday regarding the effects of increasing the minimum wage. Most Democrats back a plan to spike minimum wage from $7.25 to $15 per hour, but there will be serious consequences for that move.
A $15 per hour minimum wage “would likely cause 1.3 million people to lose their jobs,” the Washington Examiner reported based on the CBO findings. “This would erase the overall benefits of the higher wage, with family income falling by $9 billion or about 0.1%, adjusted for inflation.”
The sobering facts may dampen the promises of liberals currently battling for the 2020 presidential nomination. Many candidates have touted a higher federal minimum wage as part of their platforms, while Democrats in Congress are trying to pass the Raise the Wage Act this summer.
While going with a $15 minimum wage could help some low-income workers, the CBO report explained that this benefit would be mostly wiped out by the other workers who are hurt by the plan.
“The agency’s analysis found that while the poorest would benefit from the effort, most others would see losses,” the Examiner reported.
“The increase would raise the pay of about 17 million workers currently below the $15 level and another 10 million workers slightly above it, but this would be offset by the reduction in income for families above the poverty line due to fewer jobs, higher prices, and loss in income for business owners,” the outlet continued.
In other words, the money has to come from somewhere. As conservatives have been saying for years, you can’t magically mandate high wages without employers re-structuring their prices and payroll to cover the raises.
“The consequences will be especially brutal for small businesses, which already operate within razor-thin budget margins,” said Alfredo Ortiz of the pro-business Job Creators Network, according to the Examiner.
“House Democrats — who are expected to consider federal $15 minimum wage legislation this month — should take into account Monday’s report and pursue policies that will push wages up without hurting the economy,” Ortiz added.
This isn’t just conjecture. Employers in places like New York City are already struggling to give employees work after a similar minimum wage hike went into effect locally.
“New York City restaurant owners say the latest minimum wage hike is forcing them to cut workers’ hours just to stay afloat,” CBS News reported in January.
“We lost control of our largest controllable expense,” restaurant entrepreneur Jon Bloostein told CBS. “So in order to live with that and stay in business, we’re cutting hours.”
Will any liberals pay attention to the report and the available evidence? Don’t hold your breath. At a time when the Democratic primary race is largely a contest over who can promise the most free stuff, basic economics isn’t exactly popular.
And that’s exactly why liberals likely face an uphill battle if they want to take back the White House. For all the talk of doom and gloom from the left and the media, the numbers show that things are actually pretty good.
Unemployment is near record lows, even for minorities like black and Hispanic Americans. Jobs are plentiful for those who are willing to work, and consumer confidence is high.
In other words, fingers will point squarely at Democrats if their obsession with ever-high minimum wage puts millions on unemployment. Allowing the free market to properly set wages or at least recognizing consequences like job losses and inflation would be a common sense idea, but these days, common sense is pretty rare.
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