Democrat lawmakers and activists thrive on the idea of a Utopian society where even McDonald’s workers make $15 an hour. However, steep wage increases are not sustainable, so they end up hurting more people than they help. In 2018, a quarter of a million Americans will feel the punch.
This year, 12 states along with the District of Columbia are implementing minimum wage increases. According to a new report shared by the Daily Caller, those increases will result in the loss of 260,000 jobs.
Even worse, when then wage increases are completely phased in, job losses are expected to exceed 1.5 million. That amounts to 10% of the anticipated number of job gains, which are projected to reach 11.5 million over the next decade.
In addition, workers aren’t the only ones who suffer from minimum wage hikes. Small businesses shoulder more of the burden created by mandatory increases and many of them will buckle under the weight.
The “Faces of $15,” an initiative started by the Employment Policies Institute, highlights the stories of struggling business owners like Nanette Hullar. She is closing the doors on her 107-year old New York diner because of the higher minimum wage rates.
Small Business and the Economy
Per the Small Business Administration, small businesses in America account for 55% of all jobs. Moreover, 28 million small companies account for more than half of all U.S. sales. So, it stands to reason that without these businesses the economy will collapse.
A poor economy means fewer jobs and lower overall wages.
Unfortunately, despite the warnings of economists, blue states continue to push minimum wage increases to their own detriment. Places like Seattle, Washington are a prime example. They raised the minimum wage from $13 to $15 an hour in 2016.
However, an extensive study from the University of Washington found that low-skilled workers lost $125 a month due to the wage increases. And this isn’t an isolated story either. But it is a sad one that a little common sense could help rewrite.
Poverty is a complex issue that needs a complex solution. And contrary to what the left believes, economic welfare is not the answer.