The announcement this week by Sen. Bernie Sanders has renewed the goal of the modern labor movement to double the federal minimum wage from $7.25 to $15. Back in 2019, Representative Robert Scott (D-VA-3) introduced the Raise the Wage Act that, among other things, would have seen the minimum wage increase to $15 an hour by 2025. While advocates of raising the federal minimum wage to $15 state say it will lead to 17 million Americans getting a pay raise and take millions out of poverty, they fail to understand the damage the measure will cause in terms of causing needless job losses that disproportionately affect the most vulnerable in society, raise prices and hurt small businesses.
The negative externalities of raising the minimum wage to $15 are not abstract, but they can be seen most profoundly in Seattle, a city that implemented a $15 minimum wage back in 2014. A study by the University of Washington found that after the minimum wage was increased, the city lost 3.5 million work hours per quarter and saw “the number of low wage jobs declines by 6.8%, which represents a loss of more than 5,000 jobs.” The same study also found that those on minimum wage also saw their incomes decline by “$125 per month” as a result of fewer hours worked.
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