A $15 minimum wage would eliminate millions of jobs: A recent Congressional Budget Office study predicted that if Congress were to raise the federal minimum wage to $15, 1.3 million and possibly 3.7 million or more jobs could be lost by 2025. A 2011 Heritage Foundation estimate was even bleaker. It estimated a $15 minimum wage would lead to 7 million lost jobs.
A $15 minimum wage hurts low-income and low-skill workers: While experienced workers would benefit, it would reduce opportunities for low-skill workers to gain valuable work experience, ultimately limiting career advancement. Economists have found that the minimum wage reduces individuals’ hours and earnings in the long-run, with the most adverse effects suffered by black workers.
A $15 minimum wage hurts small businesses: While large corporations like Amazon have been able to achieve a $15 minimum wage by automating lower-wage positions, a $15 minimum wage would drive smaller businesses from the market who cannot afford $15 per hour.
A $15 minimum wage increases prices: Businesses will largely pass the cost of the wage increase on to consumers. A 2017 Heritage Foundation report estimated that a $15 minimum wage would cause prices at fast food restaurants to rise between 24% and 38%. Price increases disproportionately hurt the poor more than the rich.
A $15 minimum wage has already failed: Where $15 minimum wages have been instituted we have seen exacerbated homelessness in cities like San Francisco, where employers cannot afford to hire homeless people who simply do not provide $15 worth of work. Long-term employment effects where a $15 minimum wage has already been instituted include:
- Los Angeles: 3% reduction in overall employment
- Seattle: 2% reduction in overall employment
- San Francisco: 1% reduction in overall employment
A federal $15 minimum wage forces a one-size-fits-all policy onto states: Raising the federal minimum wage ignores the fact that the cost of living looks radically different depending on the region. For example, New York is much more expensive to live in than Alabama. A one-size-fits-all approach disproportionately hurts states with lower wages and living costs.
A strong economy is the solution: The best way to boost incomes and opportunity is through a strong economy. Over the past year, the wages of the bottom 10% of workers increased at twice the rate of the top 10% of workers—6.6% vs. 3.3%. Also, the Earned Income Tax Credit already effectively raises the $7.25 minimum wage to between $10 and $11 per hour and doesn’t push others into poverty through unemployment.
Additional Reading:
The Heritage Foundation: The Truth About a $15 Federal Minimum Wage
The Hill: Would a $15 minimum wage help or hurt low-income workers?
Daily Signal: Here Are 6 Ways a New Report Devastates the $15 Minimum Wage