As part of ongoing efforts to pass another COVID-19 relief package, congressional Democrats are still including a proposal to more than double the current federal minimum wage, increasing it to $15 per hour by 2025.
Naturally, most of the policy debate has focused on how many jobs would likely disappear after such a change goes into effect. However, this well-worn back and forth over the number of existing jobs that could be lost if the proposal is enacted glosses over the true cost of a $15 federal minimum wage — crippling the lifelong economic prospects of teens and younger workers by reducing opportunities to develop the skills needed to succeed in the modern labor market.
Like almost any policy, dramatically increasing the minimum wage would have both winners and losers. Minimum wage workers able to keep their jobs would see an increase in pay, while others would see their jobs disappear. The nonpartisan Congressional Budget Office (CBO) estimates that phasing in a $15 federal minimum wage would reduce poverty, but would also mean 1.4 million fewer jobs. Furthermore, these costs and benefits would not be evenly distributed. Dynamic cities with tight labor markets will shrug at an increased minimum wage, while economically depressed areas with a lower cost of living would be hit much harder. More productive workers would likely gain employment opportunities, while less productive workers, such as teenagers and younger workers with less experience, would have far fewer.
Continue reading at The Hill.
Ben Wilterdink is the former Director of Programs at the Archbridge Institute. Follow him @bgwilterdink.
Economics of Flourishing
As part of ongoing efforts to pass another COVID-19 relief package, congressional Democrats are still including a proposal to more than double the current federal minimum wage, increasing it to $15 per hour by 2025.
Naturally, most of the policy debate has focused on how many jobs would likely disappear after such a change goes into effect. However, this well-worn back and forth over the number of existing jobs that could be lost if the proposal is enacted glosses over the true cost of a $15 federal minimum wage — crippling the lifelong economic prospects of teens and younger workers by reducing opportunities to develop the skills needed to succeed in the modern labor market.
Like almost any policy, dramatically increasing the minimum wage would have both winners and losers. Minimum wage workers able to keep their jobs would see an increase in pay, while others would see their jobs disappear. The nonpartisan Congressional Budget Office (CBO) estimates that phasing in a $15 federal minimum wage would reduce poverty, but would also mean 1.4 million fewer jobs. Furthermore, these costs and benefits would not be evenly distributed. Dynamic cities with tight labor markets will shrug at an increased minimum wage, while economically depressed areas with a lower cost of living would be hit much harder. More productive workers would likely gain employment opportunities, while less productive workers, such as teenagers and younger workers with less experience, would have far fewer.
Continue reading at The Hill.
Ben Wilterdink
Ben Wilterdink is the former Director of Programs at the Archbridge Institute. Follow him @bgwilterdink.
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