With the enactment of the New Deal’s National Industrial Recovery Act in 1933, the first federal minimum wage was established. The ultra-right Supreme Court of the time quickly declared it unconstitutional. In 1936, President Franklin D. Roosevelt ran for reelection on the promise of continuing to fight for a federal minimum wage. In contrast, the Republican platform that year did not explicitly call for one, but it did piously concede that individual states might establish minimum wages for women and children.
Roosevelt’s landslide victory so alarmed conservative Justice Owen Roberts that he reread the Constitution and discovered that the federal government does have the authority to set a minimum wage. In a 1937 minimum-wage dispute, he switched sides, paving the stage for the passage of the Fair Labor Standards Act in 1938.
The minimum wage is fixed at 25 cents per hour under the Fair Labor Standards Act. That’s around $4.60 now, adjusted for inflation. This was a compromise with Southern senators: the original version of the law called for a minimum wage of 40 cents per hour, or about $7.37 in today’s dollars.
By 1945, the minimum wage had barely risen to 40 cents. It was nearly doubled when President Harry Truman signed a law in early 1950 boosting it to 75 cents, which is now about $8.25 after inflation.
It’s unclear what will happen next, but the odds are stacked against any big minimum-wage increases. The Senate parliamentarian determined that minimum-wage legislation could not be passed through the budget reconciliation process, which only requires 50 votes, and the Biden administration has declined to defy the parliamentarian’s decision. House Speaker Nancy Pelosi, D-Calif., has stated that the two versions would not be harmonized in a conference committee. Instead, the Senate bill will be passed by the House and sent to President Joe Biden for signature.
Democrats can now try to override a GOP filibuster with a stand-alone raise in regular order, but it would take all of the Democratic senators and ten Republicans, which is unlikely. They could also modify Senate rules to eliminate the filibuster, which appears to be a long shot.
For the time being, it looks that the federal government has abandoned America’s lowest-paid workers once again. But let’s not fool ourselves into thinking this isn’t a decision we’re making. We can choose to return to a different, fairer, and better country whenever we desire.
Inflation-adjusted minimum wage: what should it be?
Consumer prices rose 5.3 percent in August compared to the previous year, causing some anxiety as the economy recovers from the pandemic. Food prices at home increased by 3%, while food prices away from home (i.e. restaurants) increased by 4.7 percent, according to the Bureau of Labor Statistics’ latest release this week. Rents and energy prices both increased by roughly 9%.
One point of worry for employers and employees in the United States is that activists frequently exploit inflation data to support their campaign for a $15 minimum wage, or even a higher salary of $23 per hour, despite the fact that study shows such steep rises will destroy millions of jobs.
Remember, if we kept up with inflation, the minimum wage would be $23/hr right now. $15 is a good middle ground. #RaiseTheWagehttps://t.co/44l6Rqln0F
Despite the fact that inflation has risen dramatically in the last year, the so-called “The Fight for $15” is still not based on a consumer price index. If the 2009 federal minimum wage increase to $7.25 per hour were indexed to climb with inflation, it would equal $9.22 today, according to Bureau of Labor Statistics data up to August 2021.
If the minimum wage were to be adjusted to the level in 1990, it would be $7.17 now. No matter how you slice it, these data don’t even come close to, let alone support, the $23 hourly rate proposed by the union-backed One Fair Wage.
Indeed, the $15 minimum wage goal that several states and municipalities have already enacted has no precedence in history. An organizing director for the Service Employees International Union’s Fight for $15 campaign joked about the absence of genuine analysis informing their main policy goal at one meeting, saying: “We decided that $10 was too low and $20 was too much, so we settled on $15.”
Unfortunately, these draconian minimum wage targets, which lack economic justification, will wreak havoc on firms and employees as they try to recover from the pandemic. According to the impartial Congressional Budget Office, the Raise the Wage Act of 2021, which proposes a $15 minimum wage nationwide, may cost the country up to 2.7 million jobs. According to economists from Miami and Trinity Universities’ industry and state-level analyses, the hospitality and restaurant industries would bear the brunt of these effects. Increases above the $15 minimum wage would have an even bigger negative impact on employer costs, and could result in the loss of many more employment.
Is the minimum salary of $15 creating inflation?
As inflation reaches historic highs, lawmakers and analysts are debating the causes, which include pandemic-related shocks as well as government-imposed limitations and swings in consumer demand.
One New York Times writer remarked this week on Twitter that recent media headlines about inflation are “all hype.” “Policies like the $15 minimum wage” are blamed by “wealthy people.” Instead of being justified in her concern over fast rising prices for everyday items, she claims the recent coverage is “hysteria,” implying that inflation benefits lower-income people since “inflation helps borrowers, and that’s what the fuss is about…not milk prices.”
Minimum wage increases in the past have been shown to induce price increases, which disproportionately affect lower to middle-income persons who spend a bigger amount of their wages on inflation-affected commodities like groceries.
The snowball effect between minimum wage hikes, such as the $15 per hour now in place in numerous states and localities and proposed at the federal level this year, and price increases is documented in a report by Heritage Foundation fellow James Sherk. A $15 federal minimum wage, for example, represents a 107 percent increase over the current federal minimum pay of $7.25 per hour. Employers must adjust their business models to accommodate for the increased labor expenditure when governments enforce substantial minimum wage increases. In many circumstances, this necessitates firms raising consumer pricing to compensate for the higher cost of providing their goods or services. Sherk claims that this hurts minimum wage workers and lower-income consumers the most, because the costs of the products they buy have climbed as well, lowering their newly boosted salaries’ purchasing power.
According to one analysis of the existing minimum wage research, which mostly contains data on price effects from the United States, a 10% rise in the minimum wage raises prices by up to 0.3 percent.
According to one of the studies evaluated by the American Enterprise Institute, the same price boost might produce price rises of up to 2.7 percent in the southern United States, where living costs and earnings are much lower. Recent study also suggests that increased minimum wages have a greater inflationary impact on employers of minimum wage earners. A research by the Federal Reserve Bank of Chicago and the United States Department of Agriculture indicated that raising the minimum wage more than doubled the price increase effect in fast-food restaurants, and much higher in lower-wage areas.
In addition, a Stanford University economist looked at the impact of price hikes by income level and discovered that while “Minimum wage workers come from a wide range of socioeconomic backgrounds, and raising the minimum wage has the greatest impact on the poorest 20% of households.
Minimum wages encourage firms to raise prices to cover some of the additional pay bill, according to this analysis of previous findings. However, this comes at a price employers must be careful not to raise prices too much, as this will generate price-sensitive client demand. Employers are unable to raise prices if they believe that doing so will reduce demand and result in decreased revenues, which will not be sufficient to fund increases in employee wages. Employers are obliged to adjust costs in other ways if this happens, such as lowering other employee benefits, reducing scheduled hours, or laying off staff entirely.
Sherk claims that the price hike effect of rising minimum wages is combined with large job loss effects, implying that minimum wage people are more likely to lose their jobs or have their hours decreased as their cost of living rises. As a result, he believes that increasing minimum wages is an unproductive approach to provide benefits to low-wage workers due to inflationary and job-killing impacts.
Why should the minimum wage be increased?
What impact would raising the minimum wage have on employment? The cost of employing low-paid workers would rise if the minimum wage was raised. As a result, some firms would hire fewer people than they would if the minimum wage were lower. However, employment may increase for specific workers or in certain conditions.
The amount of jobless, not merely unemployed, workers would reflect changes in employment. People who are jobless include both those who have left the labor force (for example, because they believe there are no jobs available for them) and those who are looking for work.
How did the CBO calculate the employment effects? The amount of the effects, according to the CBO, is determined by the number of workers affected by the rise in the minimum wage, wage changes caused by the higher minimum wage, and the responsiveness of employment to those salary changes. If the minimum wage change affected more workers, if it resulted in larger mandated increases for directly affected workers, if firms had more time to respond (for example, because the change was phased in over a longer period), and if the minimum wage was indexed to inflation or wage growth, the effects would be greater in general.
See Appendix A of the CBO’s July 2019 report The Effects on Employment and Family Income of Increasing the Federal Minimum Wage for more information on the CBO’s analysis. Despite the fact that the 2020 coronavirus pandemic and the current recession had an impact on CBO’s baseline budget and economic projections for the years 20212030, CBO has not changed its methods for estimating how employment would respond to a higher minimum wage, in part because CBO expects employment to be near the level it was in the baseline projections underlying the 2019 report in a few years.
How long would people remain jobless if they lost their jobs as a result of a minimum-wage increase? At one extreme, a raise in the minimum wage might permanently lay off a tiny group of workers, preventing them from benefiting from increased pay. On the other hand, a big group of workers may bounce in and out of work on a regular basis, going unemployed for brief periods of time yet earning greater income during the weeks they were worked.
CBO used its estimates of the distribution of unemployment durations for the 20002020 period to assign directly affected workers either no joblessness or a duration of joblessness within the projection year that was randomly chosen from that distribution in analyzing the effects of joblessness on poverty. As a result, some workers in CBO’s analysis are unemployed for over a year, while others are unemployed for significantly shorter lengths of time.
What impact would raising the minimum wage have on family income? A higher minimum wage would increase the real income of low-wage employees who already have jobs, pulling some of those families out of poverty. However, some families’ incomes would suffer as a result of other workers being laid off and business owners having to bear at least some of the higher labor costs. As a result, raising the minimum wage would result in a net decrease in average family income.
What method did the CBO use to calculate the effects on family income? The CBO forecasted future family income distributions and then blended those projections with estimates of wage rates, employment, company income, and prices. Increases in the earnings of individuals who would have earned slightly more than the proposed minimum wage if the policy had not been implemented include increases in the wages of workers who would have earned slightly more than the proposed minimum wage if the policy had not been implemented. Losses in business owners’ income and consumer purchasing power would be somewhat compensated by an improvement in worker productivity as a result of higher pay. (This boost in production could come from a variety of sources, including a decrease in turnover.) See The Effects of Raising the Federal Minimum Wage on Employment and Family Income for further information.)
What impact would raising the minimum wage have on the number of individuals living in poverty? A higher minimum wage would elevate some families’ income beyond the poverty line and so reduce the number of people in poverty by increasing the income of low-paid workers with jobs. Low-wage workers who lose their jobs, on the other hand, will see their earnings plummet, and in certain situations, their family’s income will fall below the poverty line. The first effect would be stronger than the second, resulting in a decrease in the number of individuals living in poverty.
How did the CBO calculate the number of persons living in poverty? The CBO estimated the distribution of poverty in future years using the same methodology it used to project the distribution of family income, using the same definitions of income and poverty criteria as the Census Bureau. According to the CBO, the poverty line will be $21,260 for a family of three and $26,850 for a family of four in 2025 (in 2021 dollars).
What is the probability of these outcomes? The magnitude of any option’s effects on employment and family income is highly unknown. There are two primary causes for this. First, future wage increase is questionable under existing law. If wages grow faster than the CBO predicts, wages will be higher in future years than the CBO predicts, and increases in the federal minimum wage will have a lower impact. The effects would be greater if wages grew more slowly than the CBO predicted.
Second, there is a lot of ambiguity regarding whether or not a raise in the minimum wage will affect employment. Increases in the minimum wage would result in bigger job losses if employment is more responsive than the CBO predicts. If employment is less responsive than the CBO predicts, however, the decreases will be less. The study literature on how changes in the federal minimum wage effect employment reveals a wide range of results. Many studies have found little or no effect, whereas others have discovered significant job losses.
Is it possible that raising the minimum wage will have unintended consequences? Studies have looked at the relationship between minimum wages and a variety of outcomes other than employment and family income, such as labor force participation (whether a person is working or actively looking for work), health outcomes like depression, suicide, and obesity, education outcomes like school completion and job training, and social outcomes like crime. In this research, CBO did not go into the other possible outcomes. However, Appendix B of The Effects on Employment and Family Income of Increasing the Federal Minimum Wage contains a list of sources.
The CBO calculated how a $15 minimum wage option would effect the federal budget in The Budgetary Effects of the Raise the Wage Act of 2021. Changes in macroeconomic factors like inflation and aggregate income were factored into the analysis.
How have the estimations generated by this tool altered as a result of the updates? The current version of the tool produces different results than the first version released in 2019. This is due to two factors. To begin, the alternatives would be introduced in 2022 rather than 2020, though they would be fully implemented on January 1st, 2025, 2026, or 2027, as in the previous version. Under existing law, earnings would grow over time, so any increase in the minimum wage would have a smaller impact on wages, and thus on employment and family income, if it occurred later. Second, because changes in mean salaries are the most important contributor to budgetary effect estimations, the tool now displays mean (rather than median) estimates from distributions of anticipated outcomes. The means are often greater than the medians because those distributions include some really large values. See The Budgetary Effects of the Raise the Wage Act of 2021 for a more in-depth look at these changes.
The CBO also changed the size of incremental changes to the minimum wage leading up to the policy’s target minimum wage. The overall increase in the minimum wage was allocated evenly across the years of a policy’s implementation in the original version of the tool. Annual minimum wage increases are equivalent to those imposed by the Raise the Wage Act of 2021 in the updated edition. As a result, the biggest gains occur in the first year after a policy is implemented.
How does the Raise the Wage Act vary from the default policy option? This interactive’s default option closely resembles the Raise the Wage Act of 2021, which the CBO analyzed in its February 2021 report. The standard minimum, for example, reaches $15 per hour four years after the first incremental increase, the subminimum for tipped workers reaches parity with the regular minimum two years after the regular minimum reaches $15, and both minimums are indexed to changes in median hourly wages once they reach their targets. The key difference is that the first incremental rise occurs on January 1, 2022 in this interactive, whereas it was anticipated for June 1, 2021 in the February 2021 report.
Will I be given a raise if the minimum wage rises?
Raising the minimum wage means that employers and employees in the United States are legally obligated to increase the hourly compensation of their minimum-wage employees—and only their minimum-wage employees. If you currently earn more than the minimum wage, your employer is not compelled to give you a raise.
While it won’t be required, it’s expected that many organizations will raise pay rates for their other employees as well. Here are some of the reasons for this:
- They’ll want to be able to distinguish between different skill levels: Let’s imagine you’re currently employed in a semi-skilled employment that pays $15 per hour. You hold a technical degree and have worked in the field for several years. If the minimum wage is increased to $15 per hour, you will be paid the same as a high school student who works part-time for the same employer. Most businesses understand that this isn’t fair to you, and that various jobs deserve varied pay scales.
- They’ll want to keep employee morale high: Employers are also aware that compensation disparities can have a negative impact on employee morale. Employee satisfaction is heavily influenced by pay and benefits, and organizations realize that if remuneration becomes a source of dissatisfaction for employees, motivation, dedication, and passion will decrease.
- They will seek to increase employee retention because happier employees stay longer. According to study, a 10% rise in base wage corresponds to a 1.5 percent increase in the likelihood of a worker staying with their current job.
Despite the fact that raising the federal minimum wage would result in a trickle-down effect of greater labor costs across their entire organization, a majority of employers surveyed by the National Employment Law Project were in favor of doing so. In fact, a minimum wage increase was backed by 61 percent of small company owners.
How do you account for inflation in your wages?
The steps for calculating an inflation-adjusted pay increase are as follows.
- Step 1: Use the Consumer Price Index to calculate the 12-month rate of inflation (CPI).
- Step 2: Divide the percentage by 100 to convert it to a decimal (2 percent = 2 100 = 0.02).
What exactly is wage inflation?
Pay push inflation refers to an increase in the cost of products and services as a result of wage increases. Employers must raise the prices they charge for the goods and services they deliver to sustain corporate profits after pay increases. The overall increase in the cost of products and services has a cyclic effect on pay increases; as the total cost of goods and services rises, greater salaries will be required to compensate for rising consumer goods prices.
Colorado $12.56
Colorado’s state legislature established a policy in 2006 stating that the state’s minimum wage would be adjusted to keep pace with inflation using the consumer price index. Local governments in Colorado can also set their own minimum wage. In January 2022, Denver’s minimum wage for anyone working more than four hours per week increased to $15.87.
Oregon $12.75 (tie)
There are three separate minimum salaries in Oregon. The amount of money workers in Oregon make is determined by where they live. The state’s basic minimum wage will rise to $13.50 in July 2022. Workers in Portland, on the other hand, will be paid $14.75 per hour, while those in non-urban areas will be paid $12.50.
Maine $12.75 (tie)
Maine adjusts its pay based on the Northeast Region’s consumer price index. Overtime pay is available to employees who earn less than $38,251 per year.
Arizona $12.80
In January 2022, Arizona’s minimum wage was raised from $12.15 to $12.80 per hour. Workers hired by a parent or sibling, casual babysitters, employees of the Arizona state or federal government, and employees of a small firm with less than $500,000 in annual revenue are all excluded from the $12.15 minimum wage in Arizona.
New Jersey $13 (tie)
The minimum wage in New Jersey is $13 per hour for the majority of workers, however there are notable exceptions. Seasonal workers and employees who work for small businesses with fewer than six employees will get a $1.10 reduction in pay. Over the following three years, the state plans to raise the minimum wage to $15 per hour.
Connecticut $13 (tie)
Connecticut’s minimum wage is now $13 per hour, however it will increase by a dollar to $14 per hour in July 2022. If the federal minimum wage ever catches up to or equals the state’s rate, Connecticut’s minimum wage will automatically climb to.5% higher.
New York $13.20
The minimum wage in New York varies based on where you work. The minimum wage in New York City, Westchester County, and Long Island is $15. The rest of the state has a $13.20 minimum wage, which is set to rise year after year until it hits $15.
California $14
Workers in California who work for small businesses with 25 or fewer employees receive $14 per hour, while those who work for businesses with 26 or more employees earn $15 per hour. By 2023, all workers in California, regardless of their employer’s size, will be paid $15.
Massachusetts $14.25
Massachusetts’ minimum wage is required by state law to be at least $.50 higher than the federal minimum wage, yet the state has gone well over $7.25. Massachusetts increased the minimum wage from $13.50 to $14.25 in 2022 as part of the state’s ambition to reach $15 by 2023.
Washington $14.49
For quite some time, Washington has been a leader in terms of high minimum salaries. Seattle approved legislation in 2014 that calls for raising the minimum wage to $15 per hour by 2021. The city’s minimum wage has increased even more to $17.27 starting of January 2022. However, it is not the only city in Washington with a minimum wage of more than $16. Employers in the hospitality and transportation industries must pay a minimum wage of $17.54 in SeaTac, which is home to Seattle-Tacoma International Airport.
Honorable Mention: Washington D.C. $15.50
If the District of Columbia had been a state, it would have won the title of highest minimum wage state. The nation’s capital passed a $15 minimum wage in 2019 and has been increasing it on a regular basis to keep up with the city’s rising cost of living. The minimum wage, which is currently $15.50, will increase to $16.10 in July 2022.
Why is increasing the minimum wage a bad idea?
- The Biden administration wants to increase the federal minimum wage from $7.25 to $15 per hour.
- While a $15 minimum wage may benefit some employed employees, the existing data on the supply and demand side of the labor market suggests that it will price others out of the market and exacerbate the problems faced by many small firms.
- On the supply side of the labor market, Black and Hispanic workers, as well as those with lower educational attainment, are most at risk of remaining unemployed; these groups make up a significant proportion of minimum wage earners and are heavily represented in industries that have been negatively affected by the COVID-19 pandemic.
- Small businesses have been severely harmed by the pandemic on the demand side; at its worst, 41 percent of small enterprises in low-income areas closed, with a 46 percent reduction in sales since January 2020.
As part of its COVID-19 economic assistance package, the Biden administration proposes raising the federal minimum wage from $7.25 to $15 per hour. Some argue that by using the budget reconciliation procedure, Congress might raise the minimum wage with a simple majority vote in the Senate. An rise in the minimum wage, especially one as large as the one suggested, would benefit some workers while excluding others from the labor market. According to labor supply data, there are millions of unemployed employees who are low-skilled and have a low level of education. Because of the $15 minimum wage, many employees are likely to remain unemployed. On the demand side, many businesses are facing declining net revenues and, in some cases, closure; this is especially true of small enterprises already hurt by the COVID-19 crisis, which employ a disproportionate number of those individuals. A $15 minimum wage would not only stifle recovery, but it would also harm many of the employees it is supposed to aid.
The pandemic has had an impact on practically every aspect of the economy, but some industries and people have been hit particularly hard. Knowing which industries and types of workers are the most affected by the present economic environment might help determine where a significant rise in the minimum wage will cause the most harm and potentially result in more people losing their jobs.
While the Biden Administration has stated that it is committed to helping low-income individuals and families, particularly those from Black and Hispanic communities, a federally enforced minimum wage of $15 will disproportionately harm these employees. The pandemic’s destructive impact on communities of color has been extensively studied. For example, black and Latino workers make up about a quarter of the service industry workforce yet are underrepresented in management roles. Black and Hispanic workers make up 13 and 24 percent of the workforce in the leisure and hospitality business, respectively.
** Estimates for the racial groupings listed above
Because data for all races is not supplied, the terms white, black, and African American do not add up to totals. People of any race who identify as Hispanic or Latino might be Hispanic or Latino. I
Although the employment situation for Black and Hispanic employees has improved since the peak of unemployment, these groups remain disproportionately represented among the unemployed. A significant increase in the federal minimum wage could push those who are already unemployed out of the labor market, potentially resulting in more layoffs or job losses.
Those with a lower educational level are another group of workers that are particularly vulnerable. According to data from the Bureau of Labor Statistics (BLS), employees who did not complete high school were disproportionately affected by the pandemic, with unemployment soaring to 21% and remaining roughly double that of 2019. Workers with a bachelor’s degree or more, on the other hand, are seeing their jobless rates rebound to 2019 levels. Workers with lower educational attainment are more likely to work at or below the minimum wage, which is unsurprising. Because up-skilling and reskilling programs are not widely available in the United States, and higher education is sometimes prohibitively expensive, workers with low educational attainment and low skills will most likely feel the effects of increasing minimum wage.
Even as the economy begins to recover, the COVID-19 pandemic has forced many firms, particularly small businesses, to close permanently or function on razor-thin margins. Many of these enterprises are already operating in a difficult climate, having had to absorb expenditures connected with increased safety precautions and state-mandated company closures while losing revenue due to decreased activity.
The expense of a $15 minimum wage might drive the most vulnerable businesses to stop hiring, reduce employee hours, eliminate positions, or close entirely.
When COVID-19 initially began to have an impact on businesses, layoffs were concentrated in industries that required in-person assistance. The leisure and hospitality business, for example, saw 40% unemployment at its height and had the highest proportion of low-wage workers, according to 2019 BLS statistics. Mining, construction, transportation, and food services are among the other businesses that have been severely impacted by the pandemic. While there has been progress, unemployment in these industries remains high.
Given the high concentrations of low-paid workers in these industries, many of whom are now unemployed, raising the minimum wage to $15 would create additional barriers to speedy reopening and rehiring, resulting in long-term unemployment for the least educated and skilled individuals.
Due to a lack of revenue and required closures, the pandemic prompted many small businesses to close temporarily; it also forced numerous enterprises to close permanently. The highest percent change in the number of open small enterprises occurred in April 2020, with a 44 percent decrease from January 2020.
The changes in the leisure and hospitality industry, which showed an almost 50% fall in open small enterprises in April 2020 compared to January 2020, are particularly noteworthy. This industry employs the vast majority of people who would be directly impacted by minimum wage hikes, many of whom are likely currently unemployed.
As previously said, closures due to reduced business and mandates resulted in income loss; while many larger businesses were able to withstand the loss, many small enterprises were forced to close permanently or resort to layoffs as a cost-cutting solution. While the Paycheck Protection Program loans, which were established as part of the Coronavirus Aid, Relief, and Economic Security Act, brought temporary relief to many, businesses are still struggling.
Despite an increase in revenues from April to December, the status of the leisure and hospitality business remains fragile, particularly as the number of cases continues to rise.
Given that the typical non-supervisory wage in the leisure and hospitality industry is less than the proposed $15 minimum wage, these businesses would have to manage the impact of increased costs, which would reduce net revenue even further. Many small firms would be forced to raise prices, limiting demand for goods and services, or reduce hiring, cut worker hours, or eliminate positions if the minimum wage was raised.
An rise in the federal minimum wage will worsen the economic loss already experienced by many firms and their employees. While those who are able to keep their jobs will undoubtedly profit from the raise, many others will suffer further consequences. The enormous number of unemployed people who previously worked as low-wage workers in businesses that have been hit the hardest by the pandemic are particularly vulnerable. It’s unclear whether those personnel will be required to return during this period. As firms balance reduced revenues and increasing expenditures, adding a federally required cost in the form of an increased minimum wage would result in extended unemployment, reduced work hours or hiring, and increased layoffs for low-paid workers.
https://www.bls.gov/news.release/empsit.t04.htm; https://www.bls.gov/opub/reports/minimum-wage/2019/home.htm#cps mw whe char.f.1; https://www.bls.gov/opub/reports/minimum-wage/2019/home.htm#cps mw whe_
What are the disadvantages of increasing the minimum wage?
- Despite numerous attempts to raise the minimum wage, no bill has ever passed both chambers of Congress.
- Minimum wage supporters claim that reforms are needed to help salaries keep up with rising living costs, and that a higher minimum wage will raise millions of people out of poverty.
- Opponents of raising the minimum wage claim that increased salaries will have various negative consequences, including inflation, decreased company competitiveness, and job losses.