Minimum Wage Hikes Means 1.8 Million Less Jobs in the U.S.

As the minimum wage increases in several states, the more businesses are forced to cut hours and jobs.

Raising the country’s workers’ salaries in this fashion will result in 1.8 million less jobs, according to a recent American Action Forum report. 

“In the end, the additional earnings transferred from the job losers to the job keepers are minimal,” and under minimum wage increases, “for each job loss, total wage earnings only rise by $6,900,” according to the report.

Republicans have always argued that when you raise wages, businesses are forced to cut corners in other areas. And this report proves that. 

“The full minimum wage increases over the next several years will cost 1.8 million jobs,” said policy analysts Ben Gitis and Curtis Arndt. “When combined with recent previous minimum wage increases in some of the same states, the total loss comes out to 2.6 million jobs.”

The authors note that although the proposals to raise the minimum wage are “well-intended,” it is also important “to consider the negative labor market consequences.”

“Unfortunately, it is the lowest-wage, least-skilled workers who pay the largest prices for these consequences,” states the report. “While they need those experiences most to develop skills and find better paying jobs, they are the least likely to be able to keep their jobs or find a new one when the minimum wage rises.”

The former Obama administration and democrats argue that many low-wage workers are supporting a family and need an increase in income to struggle less.

“This notion that the minimum wage doesn’t need to be raised because all it is is pocket change for teenagers so they can go out and buy sneakers isn’t reflective of today’s labor market,” said Tom Perez, the former Labor secretary under Obama. “These are breadwinners for families in many, many cases.”

But again, many of these low-wage employees don’t benefit from wage increases since hours, and even jobs are often cut. 

“If the minimum wage were raised, these individuals would have a harder time finding jobs,” said Diana Furchtgott-Roth, a former Labor Department chief economist for the George W. Bush administration. “There will be more encroachment of technology into the low-wage jobs that have served as entry points for teens and low-skilled workers. If you have $15 instead of $7.25 [minimum wage], then these low-skilled workers just aren’t going to get hired.”

Another former report by the nonpartisan Congressional Budget Office had similar findings to the recent American Action Forum report. This 2014 report found that an increase to $10.10 an hour resulted in 500,000 jobs lost nationwide.

Trump has nominated Andy Puzder, the chief executive of CKE Restaurants, as Labor secretary. He is open to an increase in mimmim wage, but not a spike. 

“Instead of creating a living wage, the fight for dramatic minimum wage increases could leave millions with no wage at all,” wrote Puzder in a Wall Street Journal column in 2015.

Many democrats are disappointed in this selection and believe that Puzder won’t have the interests of workers as his first priority. 

However, Trump believes that Puzder will “fight to make American workers safer and more prosperous by enforcing fair occupational safety standards and ensuring workers receive the benefits they deserve. And he will save small businesses from the crushing burdens of unnecessary regulations that are stunting job growth and suppressing wages.”

Ultimately, a minimum wage spike would not only be detrimental to the businesses, especially small ones, but the employees would ultimately suffer with weekly hour cuts and even may lose their job entirely.