(NCFL Congress 24): A Bill to Raise the Minimum Wage to $15/Hour


An increase in the federal minimum wage to $15 per hour would have significant benefits for workers, families, businesses, and the overall economy. This essay will explore the positive impacts of such legislation, drawing upon evidence from the provided search results.

One of the primary benefits of raising the minimum wage to $15 is the direct impact on workers’ earnings. The Economic Policy Institute estimates that a $15 minimum wage by 2025 would raise pay for 32 million workers, with affected workers who work year-round receiving an extra $3,300 a year on average. This substantial boost in income would help lift many families out of poverty. According to the Congressional Budget Office, a $15 minimum wage could reduce the number of people living in poverty by 1.3 million. Urban Institute researchers project that with a $15 minimum wage and no job displacement, 7.6 million people would be lifted out of poverty as measured by the Supplemental Poverty Measure.

Higher wages also lead to improved worker well-being and productivity. Studies have shown that increasing the minimum wage is associated with better employee performance, morale, and retention. When workers earn a livable wage, they are more likely to stay with their employer longer, reducing turnover costs for businesses. 

Additionally, a landmark study found that in the years following a minimum wage increase, employment increased along with consumer spending. This boost in consumer demand can stimulate economic growth, benefiting businesses and communities.A $15 minimum wage would have a particularly positive impact on women, people of color, and low-income families. Women and people of color are overrepresented among low-wage workers who would see their pay increase. Nearly half of the families who would benefit from a $15 minimum wage rely on public assistance programs. With higher wages, many of these families would no longer need or qualify for such programs, leading to reduced government expenditures on welfare. One study estimates that a $15 minimum wage could result in annual government savings on welfare programs ranging from $13.4 billion to $31 billion.

Critics argue that raising the minimum wage could lead to job losses as businesses struggle with increased labor costs.  However, a growing body of research suggests that the employment effects of minimum wage increases are minimal. In a study of 739 estimates from 37 papers on the minimum wage and employment, Wolfson and Belman found no evidence of significant job losses. Researchers at UC Berkeley have concluded that a higher minimum wage can actually increase employment in some cases by reducing employee turnover and increasing consumer spendingWhile some businesses may face challenges in adjusting to a higher minimum wage, but many companies have found that paying fair wages is good for their bottom line.

Higher wages can lead to increased productivity, better customer service, and lower turnover, all of which can improve profitability. In fact, a study of McDonald’s restaurants found that profit margins decreased when minimum wages rose, indicating that companies were previously benefiting from low wages at the expense of their workers.

Som argue that raising the minimum wage is inflationary, but

  1. The impact on overall prices is small. Studies have found that a 10% increase in the minimum wage only raises prices by about 0.36% on average. Even if the minimum wage was raised to $15 per hour, it’s estimated this would only boost inflation by 0.1-0.2% per year spread out over several years.
  2. Higher wages are often offset by greater productivity, lower turnover, and modestly lower profits rather than being passed through to consumers as higher prices. As a result, the net inflationary impact is minimal.
  3. Minimum wage workers make up a relatively small share of the overall workforce. Therefore, while a minimum wage hike boosts their incomes, the aggregate effect on the economy and inflation is limited. One estimate found a 1% minimum wage hike would increase the total U.S. wage bill by only 0.03-0.2%.
  4. Research on past minimum wage increases, even during high inflation periods, did not find evidence of significant impacts on overall price levels. Empirical studies suggest the pass-through to prices is small.
  5. Some argue that higher minimum wages could actually reduce inflationary pressures by decreasing turnover, increasing productivity, and reducing reliance on social welfare programs – thereby lowering costs.
  6. While critics contend that wage increases will lead to an inflationary spiral, evidence indicates wage growth has not been the primary driver of the recent inflation surge and there remains room for wages to rise further without triggering major price pressures

Others argue that raising the minim wage will hurt small businesses, but this is unlikely.

  1. Many small businesses can absorb the costs through higher revenues. A study that analyzed tax return data found that on average, independent businesses in industries like restaurants and retail were able to accommodate minimum wage increases through increased revenues, with only minor employment adjustments. The researchers even observed small average increases in owner profits.
  2. Higher wages are often offset by greater productivity, lower turnover, and modestly lower profits rather than leading to large-scale job losses. As a result, the net impact on employment tends to be small. One study estimated that minimum wage increases in 2014 only reduced hiring by about one worker per firm on average, with the cuts concentrated among part-time teenage workers.
  3. While some individual businesses, particularly less productive small restaurants, may struggle with higher costs, research suggests most small businesses do not experience severe distress from modest minimum wage hikes. Policymakers need not worry about “swaths of distressed independent businesses” when considering the typical state-level increases adopted in recent years.
  4. In fact, small businesses can reap several benefits from a higher minimum wage that may offset increased payroll costs. These include boosting consumer spending in the local economy, reducing costly employee turnover, increasing worker productivity and morale, and improving customer service and satisfaction.
  5. Surveys indicate a majority of small business owners actually support raising the minimum wage. While some fear negative impacts, many believe it can benefit businesses by putting more money in the hands of consumers. One poll found 61% of small business owners favor increasing their state’s minimum wage.
  6. Historical evidence from past minimum wage increases, even during economic downturns, did not find significant negative effects on small businesses overall. While some individual firms surely face challenges, the aggregate effect on small business employment and survival appears to be modest.

In conclusion, raising the federal minimum wage to $15 per hour would have far-reaching benefits for workers, families, businesses, and the economy as a whole. Millions of low-wage workers would see a significant boost in their earnings, lifting many out of poverty and reducing reliance on public assistance. Higher wages are associated with improved worker productivity, morale, and retention, which can benefit businesses in the long run. While some argue that a higher minimum wage could lead to job losses, the evidence suggests that employment effects are minimal and can even be positive in some cases. As the cost of living continues to rise, ensuring that all workers can earn a livable wage is essential for creating a more equitable and prosperous society.


Raising the federal minimum wage to $15 per hour is a well-intentioned but misguided policy that would likely do more harm than good, especially for the low-wage workers it aims to help. While proponents argue it would raise living standards and reduce poverty, a more thorough analysis reveals that a $15 minimum wage would have significant negative consequences for employment, small businesses, consumer prices, and the economy as a whole.

One of the primary drawbacks of more than doubling the federal minimum wage to $15 is that it would lead to substantial job losses, particularly among the least-skilled and most vulnerable workers. The nonpartisan Congressional Budget Office estimates that a $15 minimum wage could cost the economy 1.4 million jobs. Businesses, especially small and labor-intensive ones, would be forced to lay off workers, cut hours, and reduce hiring to offset their increased labor costs. This would disproportionately impact women, minorities, and teenagers who tend to hold a larger share of minimum wage jobs. 

It could even lead to the automation of jobs

  1. Higher labor costs incentivize automation. As minimum wages rise, it becomes more cost-effective for businesses to invest in labor-replacing technologies like self-service kiosks, robotic assembly lines, and AI software. A higher minimum wage changes the cost calculation, making the upfront expense of automation more attractive compared to ongoing labor costs.
  2. Many low-skill jobs are susceptible to automation. Jobs involving routine, repetitive and predictable tasks, such as cashiers, assembly line workers, and clerical roles, are at high risk of being automated. These types of jobs also tend to pay near the minimum wage. As the minimum wage rises to $15, employers have a greater incentive to automate these roles.
  3. Empirical studies find higher minimum wages lead to job losses in automatable occupations. Research analyzing U.S. population data from 1980-2015 found that a 10% increase in the minimum wage leads to a 0.31 percentage point decrease in the share of automatable jobs done by low-skilled workers. The effects are most pronounced for manufacturing jobs and older workers.
  4. Automation allows businesses to reduce headcount and costs. By substituting machines for human labor, companies can operate with fewer employees, reducing their biggest expense – compensation costs including wages and benefits. While the upfront investment in automation is significant, businesses save money in the long run through increased productivity and lower ongoing labor costs.
  5. Wage compression from a $15 minimum squeezes profit margins, forcing automation. A higher minimum wage cuts into already thin profits for many small businesses and labor-intensive industries like restaurants and retail. Unable to fully offset costs through higher prices alone, businesses are pressured to maintain margins through labor-saving automation.
  6. Automation becomes necessary to compete with rivals adopting the technology. As a $15 minimum wage drives industry-wide adoption of labor-replacing technologies, businesses are compelled to automate to remain competitive. Companies that fail to invest in productivity-enhancing automation risk losing out to more efficient competitors.

Perversely, the policy meant to help low-wage workers could end up harming their employment prospects the most. Small businesses, which have already been decimated by the COVID-19 pandemic, would face an existential threat from a $15 minimum wage mandate. Many small businesses like restaurants and retail stores operate on thin profit margins and cannot easily absorb a sharp increase in labor costs. They would be forced to raise prices, lay off staff, reduce hours, or even shut down entirely. A recent survey found that 74% of small business owners believe a $15 minimum wage would negatively impact their business, with many saying they would have to close immediatelyPolicymakers must consider whether the benefits to some workers outweigh the risk of widespread small business failures and job losses.

A $15 minimum wage would also fuel higher inflation, hurting the very low-income families it aims to help. Economic research shows that businesses pass a portion of minimum wage increases on to consumers in the form of higher prices. One study found that a 10% minimum wage hike leads to a 0.36% increase in prices. If the federal minimum wage doubled to $15, it could boost inflation by 0.1-0.2% per year. While this may seem modest, the higher cost of living would erode the purchasing power of all consumers, disproportionately impacting the poor. Low-income households already struggling with food, housing and energy costs can ill-afford any further price increases.Some argue that a $15 minimum wage would stimulate the economy by putting more money in workers’ pockets, but this claim ignores the negative effects on business competitiveness and job creation.

Drastically raising the cost of labor would make many low-margin businesses unprofitable and uncompetitive, leading to reduced hiring, investment and economic growth. It would accelerate the pace of automation as employers substitute machines for workers whose labor is no longer cost-effective. And it could exacerbate geographic inequality by making it harder for less productive regions and small towns to attract jobs and investment. The economic risks of an excessive minimum wage hike could outweigh any short-term stimulus effects.It’s also critical to recognize that a uniform federal $15 minimum wage ignores vast regional differences in living costs and labor market conditions. While $15 may be more appropriate for expensive coastal cities, it is considerably above the median wage in many lower-cost states and rural areas. In effect, it would be like setting a single national price for goods and services regardless of local economic realities.  A one-size-fits-all approach would disproportionately burden businesses in lower-wage areas, leading to greater job losses there. Any minimum wage policy should allow for regional flexibility rather than imposing an inflexible national standard.

Lastly, there are better ways to boost workers’ incomes and reduce poverty that don’t risk the unintended consequences of a $15 minimum wage.  xpanding the Earned Income Tax Credit, which directly subsidizes low-wage workers’ earnings, would more efficiently increase incomes without destroying jobs. Investing in education, skills training, and apprenticeship programs would help more workers access higher-paying jobs and boost their long-term career prospects. And reforming occupational licensing laws and other regulatory barriers to entrepreneurship would expand economic opportunity and dynamism. These supply-side policies offer a more effective path to inclusive growth than an untargeted minimum wage hike.In conclusion, while the goal of raising low-end wages and living standards is laudable, a federal $15 minimum wage is the wrong policy to achieve it. The evidence suggests it would lead to significant job losses, small business failures, higher prices, weaker competitiveness, and slower growth – consequences that would disproportionately harm the most vulnerable workers and communities. Policymakers should reject a one-size-fits-all $15 mandate and instead pursue more targeted, pro-growth reforms that boost workers’ incomes and opportunities without the damaging side effects. The unintended consequences of an excessive minimum wage hike are too severe to ignore.