In the News: Blog

It is disturbing that Democrats in the Senate keep pushing for a higher minimum wage even after the nonpartisan Congressional Budget Office reported that will lead to as many as a million people losing their jobs. Read the recent report. It clearly states that raising the minimum wage would mean more income for some people now earning less than $10.10 but a terrible price for others:

ladder “(A $10.10 minimum wage) would reduce employment by roughly 500,000 workers in the second half of 2016, relative to what would happen under current law. That decrease would be the net result of two effects: a slightly larger decrease in jobs for low-wage workers (because of their higher cost) and an increase of a few tens of thousands of jobs for other workers (because of greater demand for goods and services). . . . Those job losses among low-wage workers would be concentrated among people who are projected to earn less than $10.10 an hour under current law.”

Job losses could be as high as 1 million people, CBO reported.

Raising the minimum wage isn’t a solution – it is a trade-off. The benefit is higher income for some poor people. But CBO points out that “those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families.” Instead, they're young members of better-off families, starting out in the workforce.

The CBO says that about 19% of the increased income would go to poor families. But 29% would go to families making more than three times the poverty level – that is, families making more than $72,300 in 2013 dollars, according to CBO’s projections. 

The cost, meanwhile, is that pay would fall to zero for half a million people, mostly low-wage workers. Do you know which ones? Neither do I. But as an employer, I can make a guess. It will probably be people doing things that can be done by a computer touchscreen or a machine. Businesses may decide they can just do without some work. All we know is that the danger of job loss will be greatest for people who aren’t yet earning much.

So it’s not as simple as “giving America a raise.” It’s more like Russian roulette for the working poor: About 16.5 million of them will get a raise, minus the higher prices they’ll pay because stores and restaurants will have higher labor costs. But 500,000 of them will see their pay will fall 100%. It’s a game of chance they didn’t ask for.

There are better ways to help them. It is immoral that their government would deliberately make their lives less secure.