California and New York Increase State Minimum Wage

Earlier this month, California Gov. Jerry Brown signed into law a statewide minimum wage hike to $15 an hour, effective no later than 2022. Across the country in the state of New York, Gov. Andrew Cuomo also signed into law a minimum wage hike to $15 an hour. This hike is supposed to take effect in three years; however, exceptions do exist for some small businesses and rural counties. There is also a provision within the bill that suspends the increase if economic conditions worsen by 2019.

While proponents of these bills believe a minimum wage hike increases earners for those workers, the reality is more complex. Economic research shows raising the minimum wage causes businesses to lay off workers and slow hiring. This makes perfect sense since raising the cost of low-skilled labor would price those workers out of the marketplace. The legislation passed in New York admits to this reality simply by offering exceptions to small businesses and rural counties.

The American Action Forum predicts raising the minimum wage to $15 an hour will destroy nearly 700,000 jobs in California. In 2014, the non-partisan Congressional Budget Office (CBO) predicted a federal minimum wage hike to only $10.10 could reduce employment by up to 1 million workers. The evidence shows that raising the minimum wage is bad public policy. Instead of reducing employment opportunities for low-skilled workers, Congress should prohibit federal minimum wage hikes and work to make it easier for inexperienced workers to find employment.

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