The House will soon vote on the Raise the Wage Act to implement a federal $15 minimum wage by 2024, and all but three Democratic presidential candidates support it. None of them care who gets hurt.
The nonpartisan Congressional Budget Office considered just that in a report out this week, outlining winners and losers of a hike from $7.25 to $15. Naturally, it shows at least 17 million Americans getting a raise — but also 3.7 million losing their jobs. The net effect: cutting total incomes by $9 billion.
The reason, of course, is that lots of workers aren’t worth $15 an hour — at least not when they’re starting out. That’s especially true in lower cost-of-living areas, where wages aren’t as high, but paychecks go further. Indeed, a high minimum wage pushes employers to replace workers with machines — or to go out of business entirely, if they can’t cover much higher costs.
For real-world evidence, consider Amazon, which voluntarily hiked its lowest hourly wage to $15 last year. To make this work, the company has required higher productivity of its employees and increased its use of temporary workers to handle busy periods.
Those changes prompted 100 Amazon employees in Minnesota to announce a strike on July 15, its next Prime Day sale. They insist the company turn more temps into full-time workers and relax its productivity quotas.
But if the company gives in, it’ll have to find some other way to cover the added costs. Instead, it might just move those jobs to a different state. After all, it had no problem abandoning New York City when the politicians started piling on new costs to its planned headquarters here — and it’s slowly exiting its hometown of Seattle for the same reason.
If making the world perfect were as easy as mandating a “just economy,” heavy-handed socialism wouldn’t prove disastrous every time it’s tried.
Author: Post Editorial Board