Experts have been warning for months that raising the minimum wage to $15 an hour would have dire consequences for the economy. Now the non-partisan Congressional Budget Office is backing up their assertions. Naturally, the new information is making no difference to Democrats’ plans to pass a $15 an hour minimum wage bill.
The CBO explains there are several deadly flaws in the $15 per hour minimum wage plan. While it has the potential to lift more than one million people out of poverty, it could also cost the economy up to 3.7 million jobs. To make matters worse, those who would be affected by the massive job loss would be the people the $15 per hour minimum wage plan is meant to help.
Young people who need to earn money to study — or just need work experience — would no longer be able to find available employment opportunities. Disabled individuals and immigrants who cannot speak fluent English would also find it difficult if not impossible to find employment. Even the lucky individuals who get the expected raise won’t benefit as much as they are hoping to.
Companies that need to pay their workers more than before will need to get the extra money from somewhere, and it’s safe to say that it won’t be coming out of the CEO’s paycheck or company profits. Instead, the additional cost will be passed down to consumers. Put simply, people will be earning more but their money will be worth less, leaving them no better off than they were before. There is also the additional fact that companies will turn to automation to keep business costs down. Once these jobs are given to machines, it’s safe to say that they won’t be available to human workers either now or at any point in the future.
Naturally, the fact that the $15 per hour minimum wage isn’t a good idea is not something that most progressive activists want to hear. Instead of considering the evidence and using it to come up with an alternative way to help low-income workers, liberals are questioning the accuracy of the CBO report.
One professor claimed that people who lose their jobs could be retrained for higher-paid jobs. This doesn’t consider the fact that not everyone is able or willing to find employment in certain fields. Researchers at Berkeley published a white paper stating that raising the minimum wage to $15 per hour would not have a detectable negative effect on employment. The many Democratic politicians running for the presidency are still holding fast to their support for the policy.
Raising the cost of hiring a full-time worker is one way to ensure that companies may avoid new hires altogether. This can also pass additional costs onto consumers. The cost of living will rise, and the people who are earning $15 per hour will face the exact same financial problems they are facing now. In short, the push to raise the minimum wage will wreak havoc on the economy.