House Democrats, resistant to reason, continue to press for a minimum-wage hike even though a government report says it could cost as many as 3.7 million jobs. The party of the “working man” seems to have no problem throwing low-wage workers out on the streets.
The bill, which is headed to a floor vote, would increase the federal minimum wage from $7.25 an hour to $15 an hour over five years. The Congressional Budget Office says it could kill as many as 3.7 million jobs, with a median estimate of 1.3 million, should it become law. (To be fair, the low estimate is roughly zero job losses, which seems far less credible than the upper estimate of 3.7 million, simply because the laws of economics show that when goods or services cost more, in this case labor is the service, markets respond by buying less.)
Rep. Bobby Scott, Virginia Democrat, has dismissed the job losses and is instead focusing on the CBO’s estimate that the hike would increase wages for 17 million workers (which is plausible) and move 1.3 million families out of poverty. (Which seems unlikely, since only about half of minimum-wage workers are not yet 25 years old, a quarter are teens, 64% work part time, only 221,000 are older than 25, and the never-married outnumber the married about 4-to-1, which means most aren’t providing the primary income for a family.)
But reality should never be denied, and the facts show there can be no doubt that minimum-wage hikes, even previously government-mandated wages floors, are job killers — and tend to reduce family income, as well.
- “The Seattle Minimum Wage Ordinance caused hours worked by low-skilled workers (i.e., those earning under $19 per hour) to fall by 9.4% during the three quarters when the minimum wage was $13 per hour, resulting in a loss of 3.5 million hours worked per calendar quarter.” — National Bureau of Economic Research
- “Higher minimum wages are associated with a lower share of teens age 16–17 both in school and employed, and a higher share in school and not employed.” — Mercatus Center
- “By boosting the income of low-wage workers who keep their jobs, a higher minimum wage raises their families’ real income, lifting some of those families out of poverty. However, real income falls for some families because other workers lose their jobs, business owners lose income, and prices increase for consumers. For those reasons, the net effect of a minimum-wage increase is to reduce average real family income.” — Congressional Budget Office
- More than three-fourths of full-service restaurants in New York City that responded to a survey “reduced employee hours, and 36.3% eliminated jobs in 2018, in response to mandated wage increases.” Three-quarters “report that they will reduce employee hours; and 47.1% will eliminate jobs in 2019.” — New York City Hospitality Alliance
- “An extensive survey … concluded that nearly two-thirds of the more than 100 newer minimum wage studies, and 85% of the most convincing ones, found consistent evidence of job loss effects on low-skilled workers.” — Federal Reserve Bank of San Francisco
- “The $15 minimum wage is turning hard workers into black market lawbreakers — Reason
- “Data analysis suggests that while the restaurant industry in California has grown significantly as the minimum wage has increased, employment in the industry has grown more slowly than it would have without minimum wage hikes. The slower employment is nevertheless real for those workers who may have found a career in the industry. And when the next recession arrives, the higher real minimum wage could increase overall job losses within the economy and lead to a higher unemployment rate than would have been the case without the minimum wage increases. ” — University of California, Riverside
Despite the widely understood laws of economics, and the documented history of the effects of a minimum wage, Democrats continue their “Fight for $15” as if it were a worthy objective. From their repeated actions, one could reasonably conclude their minimum-wage hikes are efforts to punish companies, from small businesses up to the largest corporations, rather than an attempt to help those at the bottom of the economic class.
It would certainly be consistent with decades of anti-business policies and rhetoric dished out by the political left.
We finish by asking a relevant question about the minimum wage that’s never posed in public: From where does government obtain the authority to force private enterprises to part with greater sums of their earnings than they otherwise would? It seems to us that tens of millions should be yelling “how dare you” to Washington, and the state capitals and city halls that have no reservations about “taking” others’ money.
Of course raising the minimum wage is not quite the same as seizing the means of production. Yet dictating how companies apply their human capital still emits a strong odor of tyranny, even though most in this country have surrendered to the notion that it’s acceptable for government to make businesses’ decisions for them. After all, it’s been doing it since 1938 — three years after the U.S. Supreme Court invalidated a minimum wage when it ruled the National Industrial Recovery Act was unconstitutional.
The economic case against the minimum wage is robust. But the freedom argument is just as strong. It’s a shame we don’t hear it more in the only nation that was ever founded in the cause of liberty.
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