America simply can't afford a $15/hr. min. wage

Friday, July 12, 2019
Chris Woodward (

$15 an hour protesters (new pic) (1)A new report finds that a $15-per-hour minimum wage would boost pay for 17 million workers in the United States – but many of those employees also stand to lose their jobs.

The report furnished by the Congressional Budget Office (CBO) discloses that as many as 3.7 million jobs could be cut in the near future – if a nationwide $15/hr. minimum wage is enforced.

Rachel Greszler – who serves as research fellow in Economics, Budget and Entitlements for The Heritage Foundation – contends that the report is important because lawmakers will soon vote on a bill to raise the federal minimum wage to $15 per hour.

"I think it points policy makers to ask some really tough questions to figure out whether or not a $15-an-hour minimum wage would actually help the workers that they're trying to [help], and I think the report shows in many ways it would not,” Greszler argued. “And it would have really negative impacts for the most marginalized workers – those who ... find the most trouble getting jobs."

The economics expert also maintained that Americans cannot expect a business in Manhattan, Kansas, to pay the same as a similar business in Manhattan, New York – without having some major problems.

"A $15-an-hour minimum wage … costs an employer over $38,000 per year to employ somebody – that’s when you add on the federally required taxes and benefits," she explains. "Not many workers that lack experience or education can produce $38,000 a year, and so it's quite clear what will happen – particularly in areas of the country that have these lower costs of living. They're going to cut jobs, and businesses themselves will have to close down eventually."

Greszler explained the unworkable scenario of jacking up the minimum wage in America to $15-an-hour another way.

"If you're a small employer – a mom and pop family restaurant that has 10 employees – you would have to pay $15 per hour, compared to the $7.25 minimum. That's a huge impact," she stressed. "I did some math, and they would have to make $67,000 more per week to cover the costs of those higher-wage bills, so I think it should be pretty obvious that a lot of businesses simply can't afford this, and what they're going to turn to is laying off workers, cutting back on hours and also increasing prices."

Grezler also contends there is a tax-friendly mechanism in place for low-wage workers: the earned income tax credit. 

"There are some problems with the tax credit," she says. "It has a lot of overpayments and other issues, but overall that's a more effecient way to get minimum wage workers higher wages than to mandate employers raise their wages and then push some people into poverty by losing their jobs."


Editor's Note: This story has been updated with additional comments from Grezler. 

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