Requiring more from struggling businesses – What could go wrong?

Thursday, January 28, 2021
 | 
Chris Woodward (OneNewsNow.com)

$15 an hour protesters (new pic) (1)Considering the strain the pandemic has already put on businesses, an economist does not think House and Senate Democrats should have introduced legislation to raise the federal minimum wage to $15 an hour by the year 2025.

While the proposal is not the same as telling businesses to pay their employees more money now, economist Jonathan Williams with the American Legislative Exchange Council (ALEC) does not think this will ultimately help businesses and the workers who stand to benefit from higher wages.

Matthews

"Minimum wage is a federally flawed economic policy that would cause job loss," he submits. "It would cause more small business closures in the wake of so many just being on the ropes or maybe going out of business already because of COVID pandemic."

Merrill Matthews, resident scholar at the Texas-based Institute for Policy Innovation, agrees. He recently told One News Now, "If [Biden] gets the $15 an hour he's pushing, a lot more businesses will shut down because of that, especially in certain states."

In 2019, the Congressional Budget Office (CBO) issued a report warning that 1.3 million jobs could be cut if the minimum wage was increased to $15 an hour.

Williams

"Their projections were based on a phase in of $15 an hour by 2025," says Williams. "By the way, it should be noted that CBO … projected this during a growing economy, not during an economy that has been battered by the pandemic and by the economic lockdowns."

In 2019, the Democrat-led House approved legislation to increase the federal minimum wage from $7.25 to $15 an hour. That legislation did not move in the then-GOP-controlled Senate. However, because Democrats now control the House, Senate, and White House, it may not be a matter of if but when the minimum wage is increased.

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