The Raise the Wage Act will Kill Jobs, Provide Less Pay, and Hurt States | Citizens Against Government Waste

The Raise the Wage Act will Kill Jobs, Provide Less Pay, and Hurt States

The WasteWatcher

The Raise the Wage Act, which is sponsored by Representative Bobby Scott (D-Va.), will hurt workers across the country.  The bill would gradually increase the minimum wage from $7.25 to $15 an hour by 2025.  But instead of increasing pay for workers across the country, the legislation will instead decrease pay, as well as cause layoffs and reduced hours.  The Raise the Wage Act will also affect states and cities, all of which have different economic circumstances that necessitate separate decisions about which minimum wage rate works best in their communities, rather than a single wage being mandated by the federal government. 

Former Iowa Representative Linda Upmeyer argued that a federal wage fails to consider the cost of living for each state.  Food and housing is less expensive in Iowa and other Midwestern states than they are in states like California and New York.    

Not only would a federal mandate usurp the authority of states to set a minimum wage that works for their residents and economies, but it also harms workers by decreasing their pay and hours.  The legislation guarantees tipped and teen workers a full minimum wage, which would force employers to reduce their work hours and create an overall wage reduction. This concept has been proposed and rejected in several cities across the country, including Washington, D.C. These policies will cause layoffs for other workers when an employer can no longer afford to pay this new mandated increased rate of compensation.  I will be harder for those starting out in their careers or seeking initial entry in the workforce to find a job.  Allowing people to have a job with a minimum wage that is appropriate for the local economy is really a “starter wage” and that is better than having no job at all. 

Even if the Raise the Wage Act is not enacted, states and cities still should consider the effects of raising the minimum wage to $15 or more an hour.  For example, after Seattle raised its minimum wage to $15 an hour beginning in 2015, a study found that low-wage workers lost an average of $125 a month because of layoffs and reduced hours.  Florida voters also approved a ballot initiative in November 2020 to raise the minimum wage to $15 an hour, which will likely produce similar results. 

While it is important for states to decide the minimum wage, the best solution is to enable companies and employers to make decisions by offering competitive wages and benefits to their employees.  Companies like Amazon and Charter Communications decided to raise their minimum wage to $15 per hour without the government getting involved.  But they are obviously far different from a local restaurant of convenience store, with 10 or fewer workers.

The Raise the Wage Act will kill jobs, harm the workforce, and remove states from the decision-making process.  This one-size-fits-all approach will negatively affect states as they are different from each other, and it will not do much to boost the economy in the middle of the coronavirus pandemic.  Individuals could be left with reduced working hours resulting in less pay, or be without a job entirely as a result of this mandate. 

Members of Congress should remember this when they are considering whether to support the Raise the Wage Act:  Philadelphia, Pennsylvania, is not Philadelphia, Mississippi.