Dems Push $12 Federal Minimum Wage, Economists Warn of Lost Jobs

By Published on May 2, 2015

Organized labor was quick to praise Democrats who introduced legislation Thursday to raise the federal minimum wage to $12, but some economists warn the bill could actually hurt workers.

The bill, which was introduced by Sen. Patty Murray and Rep. Bobby Scott, would increase the federal minimum wage from $7.25 per hour to $12 per hour by 2020.

“Low wages are the crisis of our time,” Service Employees International Union  International President Mary Kay Henry, who rakes in roughly $300,000 a year, declared in a statement. “To solve this crisis, our country needs a minimum wage that families can live on, and workers must be free to join together in a union and fight for the higher pay they deserve.”

The SEIU, which has pushed for a $15 minimum wage, wasn’t the only union to support the bill.

“It’s inspiring to see the momentum generated by working people across the country influence some of the largest corporations and the most powerful political forces,” AFL-CIO President Richard Trumka said in a statement. “Raising wages for working people is the defining issue of our time and workers are capturing and expanding it.”

The Employment Policies Institute (EPI) however warns the bill could result in young people and low-skilled adults having more difficulty finding a job.

“These consequences aren’t hypothetical,” EPI detailed to The Daily Caller News Foundation. “The nonpartisan Congressional Budget Office estimated last year that a half-million jobs would be lost from a $10.10 minimum wage. A $12 wage mandate would only compound that damage.”

“Real-world evidence also confirms these negative effects,” it continued. “For instance, Oakland, CA raised its minimum wage to $12.25 on March 1st, and local reporting illustrates that the move has had serious consequences that foreshadow what would happen nationally at a $12 minimum wage.”

The National Bureau of Economic Research (NBER) and The Heritage Foundation also both found employment opportunities for young and low skilled workers falls when the minimum wage goes up.

Furthermore, the Illinois Policy Institute (IPI) found most workers are able to move beyond the minimum wage after only a year of employment.

“Of those workers making the minimum wage today, two-thirds will be earning a higher wage one year from now,” an IPI report by Naomi Lopez Bauman stated. “Most workers, once they learn the job and demonstrate a level of competence, will earn more as the value of their labor increases to their current employer or a competing one.”


Copyright 2015 The Daily Caller News Foundation

Print Friendly, PDF & Email

Like the article? Share it with your friends! And use our social media pages to join or start the conversation! Find us on Facebook, Twitter, Instagram, MeWe and Gab.

Military Photo of the Day: Through the Smoke
Tom Sileo
More from The Stream
Connect with Us