The “Fight for 15” crowd could be left fighting for jobs if their dream of a $15 minimum wage comes true.
A $15 minimum wage nationwide would cost 6.6 million jobs and affect 55 million workers, according to a new study published by the American Action Forum and the Manhattan Institute for Policy Research (my former employer). Low-wage workers would see gains of $105.4 billion spread among them, even after the job losses. But less than 7 percent of that gain would go to workers who actually live in poverty.
“Not only would overall employment growth be lower as a result of a higher minimum wage, but much of the increase in income that would result for those fortunate enough to have jobs would go to relatively higher-income households—not to those households in poverty in whose name the campaign for a higher minimum wage is being waged,” Manhattan Institute President Lawrence Mone wrote in the study’s foreword.
The study assumes the minimum wage would gradually rise to $15 an hour by the year 2020.
For comparison, the study projects that a $12-an-hour minimum wage would cost 3.8 million jobs and affect 38.3 million workers.
“Any potential benefits from raising the minimum wage would be greatly offset by the negative labor-market consequences of the policy,” the study’s authors wrote. “Overall, the income gains from raising the minimum wage would come at a significant cost to the large number of workers who would become jobless. In effect, raising the minimum wage transfers incomes from the low-wage workers who are unfortunate to become jobless to the low-wage workers who remain employed. It accomplishes this without effectively helping those who are most in need.”
A few major cities in the United States have signed $15 hourly minimum wages into law, with the minimum gradually rising to that level within the next few years: Seattle, Los Angeles and San Francisco.
Sen. Bernie Sanders, I-Vt., who is vying for the Democratic presidential nomination, introduced a Senate bill to raise the minimum wage to $15 an hour nationwide.
The current federal minimum wage is $7.25 an hour, although 29 states have set their own minimum wage rates to higher levels.
The study was co-authored by Douglas Holtz-Eakin, former director of the Congressional Budget Office and current president of AAF, and Ben Gitis, director of labor market policy at AAF.
“Fight for $15” is a nationwide organization funded by labor unions that organizes one-day strikes of non-unionized low-wage workers. The organization claims to have thousands of workers active in hundreds of cities.
