$15 Minimum Wage Draws Bipartisan Opposition From Economists, Politicians
Research, real stories show damage of extreme wage hikes
Publication Date: April 2017
Topics: Minimum Wage
Washington D.C. – Today, the Employment Policies Institute criticized a proposal by the Congressional Progressive Caucus to raise the federal minimum wage by 107 percent to $15 an hour. The best academic research and real stories from across the country show the negative impacts of an extreme minimum wage hike to $15 an hour, and the policy has been criticized by a bipartisan group of economists and politicians.
A 2015 University of New Hampshire survey found that nearly three-quarters of surveyed US labor economists were opposed to a $15 minimum wage. The economists believe a minimum wage increase will have negative effects on youth employment levels, adult employment levels and the number of jobs available. Former members of the Obama and Clinton administrations have also spoken critically of a broad $15 mandate.
In 2014, the nonpartisan Congressional Budget Office estimated, based on a review of 60 studies, that a $10.10 federal minimum wage would cost 500,000 jobs nationally. Economists from Miami University and Trinity University replicated the CBO’s methodology for a proposed $12 federal minimum wage and estimated 770,000 jobs would be lost nationally as a result. This job loss would only be compounded at the $15 level.
A recent study by researchers at Harvard Business School and Mathematica Policy Research, which looked at more-recent dramatic wage increases in San Francisco, found that it increased the closure rate for lower-rated restaurants.
EPI has collected the stories of nearly 100 businesses that have closed their doors or otherwise scaled back in response to dramatic wage hikes at facesof15.com. EPI has also produced a series of documentaries to accompany the stories. In California, you can watch the stories of ARGYLEHaus of Apparel in Los Angeles and Sterling’s Family Childcare in Oakland. In New York, you can watch the stories of Jim McCanney in the Southern Tier and the Del Rio Diner in Brooklyn. Each business is a victim of $15 minimum wage legislation like that being proposed by the Congressional Progressive Caucus.
Stories from around the country of minimum wage rollbacks and resistance highlight the harsh economic realities that surround such a large increase. The county executive in Montgomery County, MD, and the Mayor of Baltimore, MD, vetoed $15 wage legislation. (The Democratic City Council in Cleveland rejected a similar plan last year.) The City Council in Flagstaff, Arizona, recently rolled back an increase to $12 set to take place this summer.
“Economists don’t agree on much, but there’s broad recognition among these experts that a $15 minimum wage is a terrible idea.” said Michael Saltsman, managing director at the Employment Policies Institute. “A truly progressive policy to raise wages would acknowledge the overwhelming evidence that a $15 minimum wage hurts those it’s intended to help.”
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding employment growth. In particular, EPI focuses on issues that affect entry-level employment. EPI receives support from restaurants, foundations, and individuals.