Sanders' $15 minimum wage could cost US millions of jobs, critics warn
After Independent Vermont Sen. Bernie Sanders announced plans to introduce a bill this week to raise the federal minimum wage to $15 per hour, critics are claiming such a move would potentially cost the U.S. millions of jobs.
Raising the nationwide minimum wage to $15 per hour by 2020 would result in the elimination of more than 2 million jobs, according to research cited in a report from the Employment Policies Institute – which opposes raising the federal minimum wage.
Losses would be particularly pronounced in Texas (269,104 jobs), Florida (145,653 jobs) and Pennsylvania (122,640 jobs).
The group says a slower phase-in period, raising to $15 by 2026, would reduce employment opportunities by 850,000 positions.
Former McDonald’s CEO Ed Rensi told FOX Business on Tuesday that raising the minimum wage would cause a spike in consumer prices, disproportionately hurt small businesses and could result in more workers being replaced by automation.
On the other hand, the Institute for Research on Labor & Employment (IRLE) at UC Berkeley, found that a higher minimum wage would actually add a small amount of jobs to the state economy by 2023. Without the increase, IRLE forecasts employment would grow 1.4 percent annually. The minimum wage increase would raise employment by 0.1 percent, equal to about 13,000 jobs, by 2023, according to the group’s study.
Not all conservatives are opposed to bigger paychecks, either, though they typically don’t support a federal mandate.
White House economic adviser Larry Kudlow, for example, argued against having the federal government set the national minimum wage since conditions vary meaningfully among states.
“The federal government shouldn’t have jurisdiction over the states anyway in a matter like this,” Kudlow said. The conditions are different in these states, the cost of living is different, the state of business is different.”
CLICK HERE TO GET THE FOX BUSINESS APP
Twenty states raised their minimum wages at the outset of 2019, including California, New York and Washington.
The current federal minimum is $7.25, which Sanders – a potential 2020 presidential candidate – referred to as a starvation wage.