Increasing the minimum wage to $15, as Democratic presidential candidate Joe Biden supports, would cost 2 million American jobs, a new report claimed.
The report comes from economics professor David Macpherson at Trinity University in Texas and business professor William Even at Miami University in Ohio. It found that enacting a federal minimum wage of $15 would hurt the economy, especially industries already hit hard by the coronavirus pandemic.
The report looked at the Raise the Wage Act, which passed the Democrat-controlled House of Representatives in 2019 before the pandemic hit. The bill has no hope of passing a Republican-controlled senate, but if the two runoff elections in Georgia swing Democrat, control of the Senate could flip and the party could pass the minimum wage increase under a potential President Biden.
Biden, however, has not been officially declared the winner of the 2020 election. President Donald Trump still has numerous lawsuits in multiple states that must work through the system.
Who will be hit the hardest?
Those hardest hit by a potential minimum wage increase would be those the Democrat Party claims to care most about: women. It would also hit young Americans particularly hard, who vote in droves for Democrats.
“The Arts, Entertainment, and Recreation and Accommodation and Food Services sectors will account for half of these job losses. Workers aged 16-24 will see the highest proportion of job losses, and the majority of jobs lost will be those held by women. Tipped workers will also lose a greater share of jobs affected by minimum wage than non-tipped workers—one in three tipped workers affected by this federal minimum wage increase will lose their job,” the study found.
The study’s authors did not take into account slowed employment growth and job losses in cities that have already enacted a $15 minimum wage, and noted that slow or negative growth could continue for tipped employees beyond 2027 – the year the bill requires the $15 minimum wage to be met across the country – as tipped wages would take longer to reach $15.
Cities that have already enacted a higher minimum wage have proven the negative effects
The report comes to a similar conclusion as the Congressional Budget Office, on which the two professors based their assumptions. The CBO found that raising the minimum wage over the next half-decade could put up to 3.7 million out of work.
“In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO’s median estimate. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million,” the CBO report found.
These are just reports. Cities that have enacted a higher minimum wage have proven Republicans correct about the negative consequences of such a hike.