emocrats have many problems, not the least of which is an inability to understand, and for some the refusal to accept, basic economics. If they did, there wouldn’t be proposals to raise the federal minimum wage to a preposterous $25 an hour.
House Resolution 8555 would “place the federal minimum wage on a durable path toward a living wage,” requiring “large, highly profitable corporations to lead the transition.” Under its yoke, large employers would have to raise their lowest wage from the current $7.25 an hour to $15 an hour on Jan. 1, 2027, a more-than-double spike that would shock the market.
Large companies, defined as those with annual gross revenues in excess of $1 billion (there are more than 6,000 of them) or with 500 or more employees nationwide, will have to ramp up their minimum wage every Jan. 1 thereafter until the minimum hits $25 an hour on Jan. 1, 2031. Smaller companies will have to boost their hourly minimum to $14 next New Year’s Day and will have to meet the $25-an-hour standard by 2038.
“We can afford it,” declares Connecticut Democratic Sen. Chris Murphy, who late last month introduced a similar bill in the Senate. “It’s not like we can’t pay a $25 minimum wage, we just choose not to because we’ve become okay with dozens and dozens of people in this country making hundreds of billions of dollars.”
Who is “we,” Senator? Which company do you own? Which business did you start that will fall under the government’s wage boot? When was the last time you had to meet a company payroll? Anyone who would say “we” in this context is definitionally low-minded.
Minimum-wage hikes are a combination of economic tyranny (there is no moral authority for lawmakers to tell private businesses how much they have to pay their workers, so they simply delegated the power to themselves) and economic lunacy.
Raising the cost of anything, including labor, will lower demand, and in the case of a government-mandated minimum wage, that would be the demand for workers in the private sector.
In late 2023, the Congressional Budget Office said if the Raise the Wage Act of 2023 were passed and the federal minimum wage were increased in yearly increments to $17 per hour by July 2029 — just 18 months before the $25-an-hour wage floor of HR 8555 would kick in — there would be blood.
“Employment would be reduced because employers would respond by reducing their workforces,” says the CBO. “As a result, 0.7 million additional workers (or 0.4% of the overall workforce) would be jobless.”