If President Joe Biden’s proposal goes through, raising the federal minimum wage to $15 an hour would cost an estimated 1.4 million jobs and employers more than $99 billion over the next four years, according to a Congressional Budget Office report. The report explains that higher wages would increase the cost of producing goods and services because employers would reduce their workforce or end up hiring fewer employees.
The report fueled a debate on whether or not the wage raise should be a part of the COVID-19 package that President Biden is asking Congress to approve. White House press secretary Jen Psaki said Biden was “firmly committed” to raising the minimum wage to $15 per hour and believes any American working a full-time job trying to make ends meet should not be at the poverty level.
Biden acknowledged that his plan to get federal wage on the floor likely won’t make it through the $1.9 trillion spending plan, though he remains committed to the increase. Democrats have been trying to shove the bill through Congress without the support of Republicans, known as “budget reconciliation.”
The Employment Policies Institute, which is backed by the restaurant industry, takes the opposite stance and argues that the report only confirms what a terrible idea the wage raise is. They said it would only cost jobs and cite myriad benefits while creating an impossible challenge for restaurants, which have already been hit hard by the coronavirus pandemic.
“Far too many restaurants will respond by laying off even more workers or closing their doors for good. As the pandemic has highlighted, the economic realities of each state are very different. A nationwide increase in the minimum wage will create insurmountable costs for many operators in states where restaurant jobs are most needed for recovery,” said Sean Kennedy, National Restaurant Association executive vice president of public affairs.
The U.S Chamber of Commerce also shared concerns over raising the federal minimum wage to $15 in the middle of an economic recovery. They said so many of the jobs lost are those that tend to be on the lower end of the wage scale and would only be hurting people in poverty more.
It would be the wrong time to force struggling employers to keep their staff on payroll with higher wages. Small businesses are still dealing with the pandemic and coming out of an economic downturn after the draconian government lockdowns.
The bill would also phase out the tipped minimum wage for restaurant service workers and cut the workers take-home wages in the thousands. Eliminating tipped minimum wages would result in fewer hours for waitstaff and higher menu prices.
Incoming Senate Budget Committee Chairman Bernie Sanders, along with Raise the Wage Act, looks to raise the minimum wage to more than double the current rate, which is $7.25 an hour, by 2025.
If successful, the country will slip right back into an economic depression where small businesses continue to struggle and the Democrats preach more about “equality” while cutting jobs left and right.