I & I Editorial BoardDemocrats have many problems, not the least of which is an inability to understand, and for some the refusal to accept, basic economics. If they did, there wouldn’t be proposals to raise the federal minimum wage to a preposterous $25 an hour.
House Resolution 8555 would “place the federal minimum wage on a durable path toward a living wage,” requiring “large, highly profitable corporations to lead the transition.” Under its yoke, large employers would have to raise their lowest wage from the current $7.25 an hour to $15 an hour on Jan. 1, 2027, a more-than-double spike that would shock the market.
Large companies, defined as those with annual gross revenues in excess of $1 billion (there are more than 6,000 of them) or with 500 or more employees nationwide, will have to ramp up their minimum wage every Jan. 1 thereafter until the minimum hits $25 an hour on Jan. 1, 2031. Smaller companies will have to boost their hourly minimum to $14 next New Year’s Day and will have to meet the $25-an-hour standard by 2038.
“We can afford it,” declares Connecticut Democratic Sen. Chris Murphy, who late last month introduced a similar bill in the Senate. “It’s not like we can’t pay a $25 minimum wage, we just choose not to because we’ve become okay with dozens and dozens of people in this country making hundreds of billions of dollars.”
Who is “we,” Senator? Which company do you own? Which business did you start that will fall under the government’s wage boot? When was the last time you had to meet a company payroll? Anyone who would say “we” in this context is definitionally low-minded.
Minimum-wage hikes are a combination of economic tyranny (there is no moral authority for lawmakers to tell private businesses how much they have to pay their workers, so they simply delegated the power to themselves) and economic lunacy.
Raising the cost of anything, including labor, will lower demand, and in the case of a government-mandated minimum wage, that would be the demand for workers in the private sector.
In late 2023, the Congressional Budget Office said if the Raise the Wage Act of 2023 were passed and the federal minimum wage were increased in yearly increments to $17 per hour by July 2029 — just 18 months before the $25-an-hour wage floor of HR 8555 would kick in — there would be blood.
“Employment would be reduced because employers would respond by reducing their workforces,” says the CBO. “As a result, 0.7 million additional workers (or 0.4% of the overall workforce) would be jobless.”
The CBO does say that 400,000 who kept their jobs and received the higher wage would be lifted out of poverty. But what happens to those who no longer have jobs because employers had to cut labor costs, as well as those who aren’t hired because employers can’t afford them? Their wage is the true minimum — zero.
Of course, the results would be far worse under the $25 minimum that the economic dunces in Congress are demanding.
Projections are useful, but real life tells us even more, and the story is quite grim. The roughly 18,000 workers who lost their jobs because California forced a $20-an-hour minimum wage on the fast-food industry would agree.
In addition to killing jobs, minimum-wage hikes also increase prices, as employers pass on to consumers as much of their additional labor costs as is possible. This would, says the CBO, “lead consumers to purchase fewer goods and services.” Employers would then “produce fewer goods and services, and as a result, they would tend to reduce their employment of workers at all wage levels.”
Economic ignorance and political arrogance among policymakers have been creating messes for generations, and in one particular instance — causing and then prolonging the Great Depression —wrecked so many lives that history remembers that period as one of our worst episodes of deprivation and grief. We’ll keep getting more of the same, though, as long as voters continue sending midwits, nitwits, and petty tyrants to Washington.
— Written by the I&I Editorial Board
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Jonathan Williams and Skip Estes
These fools haven’t been to McDonald’s and seen the order kiosks that replaced the teens and seniors who needed the entry level job or supplemental income. Or the fact that prices across the board increase everywhere min wage laws are enacted.
don’t go insulting fools
Supporters should be required to run a lemonade stand, pay their help $25/hr & see how long, if ever, they turn a profit. After they pay for cups, water, sugar, Lemons, rent, advertising, insurance, permits, taxes….
A recent article elsewhere decried that Congress does not work full days or weeks and goes home Thursday night. Great, get the congressional nincompoops outta there. The longer they stay in session, the more damage they cause to our own country. Why do they cause so much legislative damage?
Their new Housing Bill is a colossal capitulation to Socialism on both sides of the aisle. Enormous expansion of the power and budget of HUD and of all government house agencies. Billions more of our taxes just for them to manage this misguided bureaucracy of the Housing Bill that is wrong at so many levels for our competitive, private enterprise country.
No demand that every housing project be bid between non union and union providers of the services needed to get competitive prices saving 25-45% on all construction; no demand that the monopoly of the Teachers Union prepare 100% of our students to graduate fully prepared to earn higher level jobs to be able to pay for unsubsidized rental apartments or maybe, with their better education, obtain a private mortgage to buy a house.
And Yes, the “No Nothings At All” in Congress fall hook line and sinker for the newest bizarre liberal progressive socialist mantra, “affordability” without understanding the every raise in the minimum wage puts millions of workers out of work, eliminates jobs, increases robots to do those jobs; those out of work, we then have to pay more taxes for their social welfare after we have already paid for their unionized public education for from $25-40,000 per year for 12 years!!
We must do much better; we can do much better.
Minimum wage laws put the economic horse before the cart. What these laws essentially do is mandate that for every hour somebody works, they will be able to consume x amount of goods, x being the min-wage. If, for example, the minimum wage is $15 per hour but you’re only producing $10 per hour of goods and services, bye bye job.
I think the most fundamental law of economics is that you cannot consume what is not first produced. I remember Leonid Brezhnev many years ago saying something to the effect that “it is an elementary fact that a society cannot consume what isn’t first produced and distributed.” The “and distributed” stuck in my mind as a marker that Brezhnev understood more about economics than the typical American politician.
Raising the price of labor is inflationary. The workers making more than minimum wage will want a raise too. They are proposing making jobs with low ROI illegal. The actual minimum wage is zero, it’s done by volunteers.
No one will be surprised when they campaign on affordability after causing inflation.
Entry-level jobs for unskilled and/or inexperienced workers aren’t supposed to pay enough to live on; they aren’t supposed to provide a “living wage” (an absurd chimera for a different response perhaps).
Considering also that literally every study ever done about the subject shows that such laws ALWAYS result in there being fewer jobs, we get to the core of the sheer stupidity of this proposal.
Of course what can one expect from a group of people, many of whom never had a real job? Heck, Obama’s only real work experience was scooping ice cream at Baskin-Robbin’s as a teenager! And Zohran Mamdani? He NEVER had a job, never had to pay rent, and sure as hell never had to meet a payroll.
Yet these inexperienced, unskilled , ignorant morons have the power to pass laws that force business owners to pay absurd wages to employees who don’t deserve it?
Why not go for broke and make the minimum wage $100/hour?
It’s not actually true that all the studies show that minimum wage laws always result in there being fewer jobs. The research is actually pretty mixed on that point, which you should easily discover if you do a quick literature review.
But the last point, “why not make the minimum wage $100/hour,” is just a slippery slope type fallacy. We could say the same about any policy that has a number attached. Why is the military budget $1 trillion instead of $5 trillion?
The $25/hour rate is not arbitrary but is designed to provide a living wage to a full time worker at today’s cost of living. Of course, it’s arguable whether the minimum wage needs to be a living wage, and if so, whether there’s a better way than minimum wage laws to reach that standard.
I have re-read the Constitution and STILL can’t find any authorization for Congress to fix the terms of private contracts – employer/employee. It needs to be challenged on that basis. In an open market, wages will rise to the level that will draw sufficient workers. Workers have the right to withdraw their labor if the wages are insufficient
What we have now is Congress critters bribing unions so the unions will contribute massive amounts of money to their election campaigns (and retirement funds), strictly unconstitutional and likely illegal
They “find” the authority in the Interstate Commerce Clause?
so why stop at $20, make it $100 if you really don’t want ‘poor people’
If the minimum wage goes to $25 an hour, that 20oz bottle of Evian water you nerds love to suck will cost you $175 a bottle.
Democrats are IDIOTS!
Friggin idiots, all of them, and the companies still donate to the morons’ campaigns.
The minimum wage increases are always favored by UNIONS–because all their contracts pay their workers a CERTAIN PERCENTAGE ABOVE MINIMUM WAGE! So every increase in the minimum wage gives all union workers instant wage increases, without new contracts or negotiations. They don’t give a damn about the non-union workers making minimum wage because every increase makes more minimum wage workers unemployed, since employers can only hire a certain number of minimum wage workers at any given pay scale; when their pay goes up, the number of workers they can afford to hire goes down and fewer workers get hired. Unions just want the wage increase in order to get THEIR OWN wages increased!
Once you know that, it makes sense. Don’t believe me? Ask ANY union worker, representative or enforcement thug to see their contract. First, they will NEVER let you see it, assuming they even have a copy of it. Second, they don’t want it to become common knowledge that their contracts ARE tied to the minimum wage.
You know, they wouldn’t have to raise the minimum wage “to help those who need help” if they cut taxes, reduced the debt and eliminated the deficit. But of course they won’t. Many voters want to be pandered to and vote for in effect “get out of jail free” cards.
Taxes aren’t an issue for people at the minimum wage income bracket; in fact, they would be eligible for the Earned Income Credit. The big costs at that income level are housing and health care.
But what’s your idea of how a full-time minimum wage worker should live? It’s true more than half are young people and not the primary breadwinners, but there are still millions who are. “Let them eat cake” is not a great answer. Do you advocate some kind of training programs so these people can move up, or what?
I’m curious, how did you move up from your first minimum-wage job? Presumably, it’s because you worked hard and gained valuable skills. So the question I would ask you is: what do you propose to do to all those people shut out of their first job because of a government-mandated minimum wage that is above the market-clearing price? Let them eat pottage?
So, because our wonderful system has billionaires we are to put small business out of business?
@John Merline I see your post claiming minimum wage jobs provide job skills and upward mobility. I have worked minimum wage jobs and can report that they didn’t actually provide those; I moved up by improving my education and leaving those jobs. Can you point to a specific example of a minimum wage job that offers any significant skill acquisition and upward mobility?
Sure, my own. I worked at minimum wage jobs in my youth and learned skills that helped me throughout my education and career. Skills like, showing up on time. Working hard. Problem-solving. Self-reliance. Learning to be a responsible human being. My guess is you learned those skills, too.