On Monday, Hot Air posted an article about an idea put forth by Senator Chris Murphy (D-CT). Senator Murphy wants to raise the federal minimum wage to $25 over twelve years. Artificially raising the minimum wage is not a new idea–it has been tried multiple times and failed each time.
The article quotes the Competitive Enterprise Institute website:
Last week, Sen. Chris Murphy (D-CT) introduced the Senate version of the Living Wage for All Act, which raises the federal minimum wage from $7.25 to $25 per hour — a 245 percent increase — over 12 years. It begins by increasing the minimum wage 66 percent to $12 an hour and then establishes separate schedules for large and smaller employers, with the former being required to raise hourly pay to $25 in only 5 years.
The article also quotes The Washington Post:
Who’s “we”? Businesses have to cover the cost of higher wages somehow — hiking prices, shrinking hours, laying off workers or hiring fewer are all on the table. A higher minimum wage also increases the incentive for automation.
Some states already know the effects of raising the minimum wage beyond what the market can bear. California set a $20 wage for fast-food employees in 2024. That eliminated 18,000 jobs within a year, according to an analysis in the National Bureau of Economic Research.
The article quotes a UC Santa Cruz paper:
On Wednesday, University of California – Santa Cruz released a real world appraisal of how the $20 mandate has affected owners and employees of fast food franchises. Stephen Owen, an economics lecturer, and a team of undergraduate helpers visited and studied more than 100 outlets in Santa Cruz and the Central Valley and came away with data that seem to validate industry predictions of the effects…
“Employees have been impacted with fewer job opportunities, reduced employee hours, elimination of overtime, and new eligibility challenges for healthcare and other benefits. Automation, such as order kiosks, mobile apps, Artificial Intelligence drive-through ordering systems, as well as other innovative assembly technologies, are being tested and implemented with the goal to reduce labor requirements.”
When wages are artificially increased, prices go up, and inflation increases. Senator Murphy needs to study economics!