Why A $15 Minimum Wage Is A Bad Idea

The minimum wage in America is currently $7.25 per hour. It has been at that level since 2009. I believe the minimum wage is overdue for an increase. Democrats have argued consistently for many years that the minimum wage needs to be increased to $15 per hour. Yet that would more than double the minimum wage.

This would be very bad for the economy and cost millions of jobs, not just in my opinion but also the Department of Labor and the Bureau of Labor Statistics. The question is, why do liberals reject proposals to raise the minimum wage by something less than $15 per hour? Why not $9 or $10 per hour, which would be a big increase?

Yet liberals are consistently against any increase less than $15/hour. Democrats are reportedly already crafting legislation to make it happen, and President Biden apparently believes he has the political capital to push it through now that the Dems have control of the House, the Senate and the White House.

While most low-income Americans favor the jump to $15/hour, let’s consider why such a move would be bad for the economy and jobs.

On the one hand, the Congressional Budget Office estimates a $15 minimum wage would increase the income of about 7 million employees at the low end of the wage scale initially. But such a move would also immediately cost 1.3 million other low-end employees their jobs, according to the Labor Department.

The reasons for this are well understood. Prices in a free market are set by supply and demand. A commodity’s price is where supply and demand stand in equilibrium. If the government sets a price above the free-market price — such as a $15 minimum wage — supply will increase, but demand will drop. Thus, employers will seek other ways of meeting their needs, such as automation, a burgeoning field in today’s digital age – or more likely by cutting staff.

Many checkout lines in large supermarkets are already unmanned, for instance, and customers check themselves out via a computer screen. Double the federal minimum wage and all but a very few checkout lines across the retail space will be automated within another year or so.

1 2 3
View single page >> |
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.