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Democrats’ Minimum Wage Gimmicks Cost Jobs

November 13, 2013

The national unemployment rate is 7.3 percent, with 11.3 million Americans unemployed – the rate has been above seven percent since President Obama took office. The labor force participation rate has sunk to 62.8 percent, the lowest in more than 35 years. And job growth has sputtered all year.

Yet, as the country struggles to recover economically, Senate Democrats with misplaced priorities are pushing for an increase in the minimum wage, knowing that it will cost jobs. Their economic policies have failed the American people, so now they are catering to special interest groups ahead of the next election.  

“Senate Democrats are packing the calendar this month with bills appealing to the party’s base as they seek a distraction from Obamacare’s troubled start.” – Bloomberg, 11/5/13

Back in January, President Obama called for an increase in the federal minimum wage during his State of the Union address. The President’s proposal was to raise the minimum wage from its current level of $7.25 an hour to $9.00 an hour -- an increase of 24 percent -- and index it for inflation. Subsequently HELP Chairman Tom Harkin sponsored legislation (S. 460) to raise the minimum wage to $10.10 an hour over two years, and to index it to inflation thereafter. This would be an increase of 39 percent above current law. 

Minimum Wage Increase Linked to Decrease in Job Growth

Democrats assert, with no empirical data, that raising the minimum wage will help low-wage workers. A recent study draws contrast with the Democrats claim -- saying that such action could actually hinder the hiring of low-wage workers. Economists at Texas A&M University estimated the loss in job growth in each state under a minimum wage of $10 an hour. The researchers found that more than 2.3 million new jobs would be lost nationwide.

$10 Minimum Wage Would Destroy Jobs Nationwide

$10 Minimum Wage Would Destroy Jobs Nationwide

Harmful to Job Growth and Existing Employment

Not only would an increase in the minimum wage reduce new hiring at a time when the country desperately needs jobs, it would actually tip the balance in many states from net employment gains to net losses. In all, 32 states that are currently experiencing employment growth would face a decrease in employment if the minimum wage were increased to $10 an hour. Cumulatively, the policy would reduce national employment by 320,700 jobs. 

The kinds of jobs lost will disproportionately hurt the same low-wage, low-skill workers who Democrats claim to want to help. Given the way our economy continues to struggle under the failed policies of the Obama Administration, this job-destroying law would hurt those who can least afford it.