Report: A $15 Minimum Wage Would Be an Economic Disaster




 

Rachel Greszler

Security,

It sounds good--in theory.

Just in time for next week's likely House vote on a federal $15 minimum wage, the nonpartisan Congressional Budget Office has come out with a caustic report on the consequences of the policy.

The report confirms what even liberal economists caution: A $15 minimum wage would "risk undesirable and unintended consequences" and lead to a survival-of-the-fittest labor market, where only the highest-skilled workers come out on top.

Democrats are under the illusion that the government can force employers to artificially increase wages with no adverse consequences for American workers. But that's like saying the government could double families' mortgage and rent payments without any consequence.

Here are six ways this new report exposes the minimum wage proposal as bad policy.

1. It would be a job-killer.

The Congressional Budget Office report estimated that a $15 minimum wage would lead to 1.3 million lost jobs by the year 2025, with job losses rising over time due to compounding negative impacts.

The exact number of job losses are highly uncertain, but the report says losses would most likely range between zero and 3.7 million, with a not-insignificant chance that losses could exceed 3.7 million.

A 2011 Heritage Foundation estimate was even bleaker. It estimated a $15 minimum wage would lead to 7 million lost jobs.

Read the full article.

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  • 2020-04-02 19:58:32Z

The U.S. unemployment rate will shoot past 10% in the second quarter and the growth rate of gross domestic product will decline by more than 7% as the coronavirus crisis grips the U.S. economy, according to projections released by the Congressional Budget Office (CBO) on Thursday. Interest rates on 10-year Treasuries will likely be below 1% during the quarter as well, according to the office, which provides nonpartisan economic analysis to the U.S. Congress. The CBO said its projections were based on information available through March 27 and that it is currently working on new estimates factoring in more recent information on the crisis, which "has been more negative than anticipated."

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