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If you own a business in a high minimum-wage city or state, you could be next. San Francisco has been steadily increasing its minimum wage from $10.24 per hour in 2012 to $14 per hour in 2017. It’s no coincidence that, from September 2016 to January 2017, over 60 Bay Area restaurants closed. Undeterred by these closures, the city council increased the wage to $15.59 per hour.
Now some members of Congress want to take this job-killing idea nationwide.
Many of those who support increasing the minimum wage have good intentions: they want to help workers and their families earn higher wages. The irony is that, doing so would achieve the exact opposite. Aside from the anecdotal evidence cited above, multiple studies have shown that minimum wage hikes hurt the people they intend to help – and those least able to afford it. A team of researchers at the University of Washington examined the effect of Seattle’s wage increase from $9.47 per hour to $13 per hour and, in 2017, concluded that it led to about 5,000 workers losing their jobs and to low-wage workers losing an average of $125 every month.
As for the Raise the Wage Act that the House is voting on this week, the Congressional Budget Office recently estimated that a national $15 minimum wage could cause 3.7 million Americans to lose their jobs.
But beyond the jobs lost are the jobs never created, and the social costs that go with knocking out the initial rungs on the economic ladder.
Minimum wage jobs – such as scooping ice cream, tending a cash register, or flipping burgers – give young and less-experienced workers the experience and habits that can lead to better jobs. These positions teach essential skills, such as reporting to a manager, dealing with difficult customers, and punctuality. Today’s young people and those with limited education will never have the opportunity to learn these skills if we raise the minimum wage and price them out of the market.
There are better ways to help these workers than one-size-fits-all, top-down solutions.
Thanks to the myriad of occupational licensing laws across our country, millions of Americans are forced to endure time-consuming and expensive processes before they can do their jobs. Fees can run in excess of $1,000 – and we aren’t just talking about doctors and layers: in some states, florists, interior decorators, hair braiders, and even fortune tellers are subject to onerous requirements. In many of these industries, there is no evidence that licensing helps improve quality or safety of service – instead, it could be costing our country 2.85 million jobs. Removing these barriers would give millions a chance to work in the field of their choosing.
Moreover, the public dialogue needs to shift to private workforce development so workers can get the skills they need to move into higher-earning jobs. That’s especially crucial in a booming economy like the one we have today, in which there are more than 7 million open jobs, many in manufacturing and STEM fields.
These are solutions that would give young and less-experienced workers a shot at future success, without destroying job opportunities for millions of others. To protect those opportunities, the House should vote no on the Raise the Wage Act.