Opinion

WILFORD: The Left’s Unhinged Reaction To $15 Minimum Wage Legislation

(Photo by David McNew/Getty Images)

Andrew Wilford National Taxpayers' Union Foundation
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If there’s a lesson that Democrats can learn from the first month of 2021, it’s that the left flank of their party exists to complain and trying to keep it happy is an exercise in futility. In the short time that President Joe Biden has held office, the left of his party has shown that it’s not operating in good faith.

When President Biden unveiled a $1.9 trillion coronavirus relief package that included $1,400 checks to individuals (on top of $600 checks passed last month), Rep. Alexandria Ocasio-Cortez quickly hit Biden for not proposing checks worth $2,000 on top of the previous check, for a total of $2,600. That’s despite the fact that Ocasio-Cortez had previously co-authored an amendment to give individuals a total of $2,000 — exactly what President Biden now proposes to do.

Most recently, House and Senate Democrats have introduced legislation to increase the federal minimum wage from $7.25 an hour to $15 an hour by 2025, getting the phrase “by 2025” trending on Twitter. Despite the fact that this radical proposal would more than double the current minimum wage across the entire country, the social media response was profoundly negative — decrying it as insufficient and creating a meaningless bidding war for who could propose the most outlandishly high minimum wage figure.

Now, the question of the optimal minimum wage is a hotly debated one, even among serious economists. The fact remains that while almost everyone agrees there is some tradeoff to be had between a higher minimum wage and increased unemployment, it’s certainly possible that a moderate, phased-in increase to the federal minimum wage to somewhere around $10 an hour could have a smaller impact on employment.

Nevertheless, even a $15 an hour federal minimum wage should be a non-starter. Economists generally agree on very few things, but 74 percent in a recent survey opposed a $15 an hour federal minimum wage. Meanwhile, two thirds said that an appropriate federal minimum wage is $10 an hour or less.

Part of the reason for this broad opposition is that, contrary to the beliefs of Twitter keyboard warriors, the country consists of more than just New York City and San Francisco. A minimum wage of $15 an hour may be more feasible in a city with a high cost of living, but in rural areas a minimum wage at that level would force small businesses into layoffs and shutdowns.

After all, the federal minimum wage is meant to be an absolute floor, not something that applies to each state. Setting the minimum wage for the entire country based on the economic circumstances of the most expensive places to live in the United States is profoundly myopic.

Also foolish is the left’s outrage at the proposed phase-in. Any responsible increase to the federal minimum wage must include some form of phase-in to give businesses time to build the added costs into their accounting. Hitting businesses with a significant wage increase immediately in the best of economic circumstances would put many out of business.

In the context of the pandemic, a minimum wage increase with no phase-in could prove disastrous. The last thing businesses already struggling to keep their heads above water despite government loans and other relief need is to take on increased costs. Small businesses across the country have worked hard to minimize layoffs despite the economic strain and suddenly making each employee more expensive through an immediate increase to the minimum wage would be the worst possible reaction.

At a time when level heads are desperately needed, it’s unfortunate that there don’t seem to be any on the left on the minimum wage issue. If there’s ever a time for performative stances to placate a perpetually unsatisfied base, it certainly isn’t now.

Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.