Why do Democrats insist on implementing policies that routinely result in putting more people out of work? Whether it’s caused by tax increases, minimum wage hikes, or other job-eliminating policies, Democrats are clearly trying to tank our economy.
While we could only speculate as to their motive, we do know they typically justify their actions with a pie-in-the-sky goal that sounds great but has unintended negative consequences on the public.
Such is the case with President Biden’s newest initiative to raise the federal minimum wage from $7.25 to $15 by June 2025.
The Congressional Budget Office, a government agency that weighs the impact of policy on the economy and budget, has provided a comprehensive summary of the impacts the Raise the Wage Act of 2021 would have on Americans if enacted by the end of March 2021.
The report the CBO revealed on Monday indicates that if implemented, the act would result in heavy job losses, increased deficit, and raise inflation; however, it would also lift many out of poverty.
- The cumulative budget deficit over the next decade between 2021-2031 would increase by $54 billion.
- Higher prices for goods and services caused by increased minimum wage would contribute to more federal spending.
- An additional $16 billion would be added to the deficit in the next ten years stemming from estimated effects of higher interest rates and changes in inflation.
- The cumulative pay of affected people would increase, on net, by $333 billion.
- Employment would be reduced by 1.4 million workers (0.9%).
- The number of people in poverty would drop by 0.9 million.
The CBO’s estimates indicate that by 2031, we will see significant pros and cons to the implementation of a higher minimum wage.
The biggest cons are that a higher minimum wage adds tens of billions to the national debt and nearly 1.5 million jobs will be lost. However, the biggest advantage to the Raise the Wage Act of 2021 is that nearly one million people will be lifted out of poverty.
Sharply raising the minimum wage in such a short amount of time seems to have more negatives than positives in this case. While some people would be raised out of poverty, many more will be sent into poverty by job cuts that will inevitably happen because of budgeting adjustments to allow for a higher minimum wage.