ATR Opposes The Raise the Wage Act

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Posted by Tom Hebert on Tuesday, January 26th, 2021, 3:00 PM PERMALINK

Democrats have reintroduced the “Raise the Wage Act,” legislation that would raise the federal minimum wage to $15/hour by 2025, more than doubling the current wage of $7.25/hour. 

If implemented, this legislation would eliminate millions of jobs, kill thousands of small businesses, and worsen the economic damage that COVID-19 has inflicted on the American economy. ATR opposes this legislation and urges Congress to reject the Raise the Wage Act. 

While a $15 federal minimum wage would be a disaster in normal times, the impact during a global pandemic would be another slap in the face to businesses all across the country. Small businesses with thin margins would be forced to raise prices which will inevitably drive consumers elsewhere, leading to further losses of revenue and layoffs. Businesses that temporarily closed during the pandemic may not reopen in the face of a $15 minimum wage. 

American workers would continue to lose their jobs if the Raise the Wage Act becomes law. In 2019, the nonpartisan Congressional Budget Office estimated that a nationwide $15 minimum wage would cost at least 1.3 million American jobs, and could cost as many as 3.7 million at the high end. 

A $15 minimum wage would especially harm low-skilled, younger, less educated workers. A recent literature review from the National Bureau of Economic Research analyzed minimum wage studies and found that the preponderance of evidence suggests that a higher minimum wage has a negative effect on low-skill employment. 

The authors of the review are clear as crystal: "....minimum wages reduce low-skilled employment. It is incumbent on anyone arguing that research supports the opposite conclusion to explain why most of the studies are wrong."  

The Raise the Wage Act also ends the tipped minimum wage, an absurd proposal considering 10,000 restaurants have closed their doors in the last three months alone. Imposing a 600 percent minimum wage increase on an already struggling industry in the middle a recession would only lead to more closures. If the left is successful, one in three tipped workers could lose their job. 

Government-mandated lockdowns in response to the pandemic have caused immense damage to the economy. Over 60 percent of business closures during the pandemic are now permanent. Nancy Pelosi’s $600-per-week unemployment payments discouraged Americans from going back to work, as 68 percent of Americans got paid more on unemployment than in the workplace. A drastic minimum wage hike would only make this bleak situation worse. 

Ultimately, raising the wage to $15/hour would harm businesses and workers all across the country and exacerbate the economic damage caused by COVID-19. Congress should reject the Raise the Wage Act.

Photo Credit: Shelly Provost

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