The Raise the Wage Act 2021 would set a federal rate of $15 an hour but businesses are worried about what it means for their bottom line.
, the government's budget scorekeeper.It concluded that raising the federal hourly minimum wage to $15 would mean more income in the pockets of 17 million Americans by 2025—but it comes at a cost.It predicted a budget deficit increase of $54 billion over the next 10 years due in part to higher government costs through unemployment insurance and health care spending.
Most significantly, it said there would be 1.4 million fewer jobs by 2025.It also found that worker pay would be boosted by $333 billion over the next decade and there would be 900,000 fewer people in poverty by 2025."If the intent is to put a big dent in poverty, that is a relatively small number," said David Gulley, professor of economics at Bentley University, Massachusetts.
"A disproportionate impact of the increase will be seen in the South and among young and low skilled workers in many parts of the country. Smaller businesses would also be more hard hit than larger businesses."He says that many of those affected are not poor, such as students who work part-time. Also if someone lives where there are few job opportunities, a minimum wage increase won't help them much. headtopics.com
The higher wages might spur fast food companies to automate production processes to reduce those needed per shift. Plus, an employer will expect more qualifications and higher productivity, crowding out younger and unskilled workers.President Joe Biden speaks at the Pfizer Kalamazoo Manufacturing Site February 19, 2021, in Portage, Michigan. A key election campaign policy for him was raising the federal minimum wage to $15 an hour.
Brendan Smialowski/Getty Images"Employers will figure out how to make do with fewer low skilled workers if they are more expensive," he said,"It's also possible that the overall economy will be much stronger in 2025, when the full $15 per hour takes effect.
"If so, then it won't be so binding to employers who may be competing for all workers—this actually might also be an argument in support of the wage hike. But, if this scenario unfolds, then the impact of the $15 wage won't be very large."
Progressives and some economists have pushed back on the CBO analysis that higher wages can only come at a cost of a higher deficit and fewer jobs. A report this month by the Economic Policy Institute (EPI) said that higher wages would in fact save the government money on major public assistance programs and increase tax revenues. headtopics.com
The graphic below provided by Statista lists the minimum wage state by state.StatistaBobby Williams opened his first Lizard's Thicket restaurant in Columbia, South Carolina in 1977. The chain he is CEO of comprises 14 branches throughout the state and has around 550 employees, down from around 700 pre-COVID.
South Carolina also has a $7.25 minimum wage, but Williams says virtually nobody pays that rate because if they did, they would get no applicants. In an industry reliant on tips, he is worried that staff would actually be making less money with a higher minimum wage.
"They would balk at a flat rate of $15—there is no incentive," he toldNewsweek."I think minimum wage should be set by the state not the federal government. Here in South Carolina it's gracious plenty, but in New York City that's not enough to live on."
Williams, who also chairs the South Carolina Restaurant and Lodging Association, says the businesses he represents are struggling due the pandemic."It has been the worst economy ever. The restaurants and just hanging by a thread," he said."We will raise our prices but at a certain point it is not good value anymore. We have to be realistic, what I sell now for $10 would not be good value at $15 or $16 a plate. I could see us not being good value and it not being worth it for customers." headtopics.com
The Minimum Wage Can Be TrickyRead moreIt is still uncertain whether the minimum wage hike can even be wrapped into the COVID relief package.Theparliamentarian, Elizabeth MacDonough, will decide whether it can pass through via the budget reconciliation process as an item linked to spending and taxation.Read more: Newsweek »
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If your business can’t survive without you starving your workers, that the free market telling you your business is shit. You don’t say? America the land of......... The 2017 Tax Cuts Didn't Work, The Data Prove It UnderTrumpMcConnellCorpsRealizedGreatestGrifts The American dream the CEO draws $100 million in salary and the employees make 10 cents the $15 dollar minimum wage is necessary for working families.
$15 should be the absolute minimum. $24 would be the hourly rate if minimum wage actually caught up with the cost of living over the past 25 years. But the super duper tax cuts they got are ok? F..k 'em Looks to me like they aren't very good businessmen and should fold their unprofitable company. Mr. Andy. Ngo.