The Adverse Consequences Of A $15/Hour Wage Hike

What’s the big “hubbub” over raising the minimum wage to $15/hour? After all, the last time the U.S. lifted the minimum wage was in 2009. The argument for increasing the minimum is to create a “livable wage” for those working at that level. However, is that the best way to help “the poor?”

The Biden Administration wants to include an increase of the minimum wage in the proposed “Infrastructure” plan. Many may forget the attempt to hike the minimum wage during his tenure as Vice-President with the Obama Administration. At that time, there was such an immense level of table-pounding you would assume a majority of Americans got trapped at minimum wage. However, let’s take a look at some numbers.

 

How Many Work For Minimum Wage?

According to the latest available annual data from the Bureau Of Labor Statistics:

“In 2019, 82.3 million workers age 16 and older in the United States were paid at hourly rates, representing 58.1 percent of all wage and salary workers. Among those paid by the hour, 392,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.2 million had wages below the federal minimum.

Together, these 1.6 million workers with wages at or below the federal minimum made up 1.9 percent of all hourly paid workers.”

Notably, that 1.9% of minimum wage, or less, workers declined 50% from the same report in April 2015:

“In 2014, 77.2 million workers age 16 and older in the United States were paid at hourly rates, representing 58.7 percent of all wage and salary workers. Among those paid by the hour, 1.3 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7 million had wages below the federal minimum.

Together, these 3.0 million workers with wages at or below the federal minimum made up 3.9 percent of all hourly-paid workers.”

Notably, this number has been reduced drastically from the 13.4% of workers earning minimum wage in 1979.

Of those 1.6 million workers, 49% were aged 19-25, according to the KFF Organization.

$15 Wage Hike, The Adverse Consequences Of A $15/Hour Wage Hike

Not surprisingly, we primarily find these individuals in the fast food, retail, and service industries.

$15 Wage Hike, The Adverse Consequences Of A $15/Hour Wage Hike

So What?

“So what? People working at restaurants need to make more money.”

Okay, let’s hike the minimum wage to $15/hr. That doesn’t sound like that big of a deal. Let’s do that math:

My son turned 16 last November and got his first job. He works as a “packer/runner” for a local restaurant to pack orders for pickup due to Covid-19 seating restrictions. Importantly, he has no experience. He also has no idea what “working” actually means and is about to experience the cruel joke of taxes.

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