A fifteen-dollar per hour minimum wage has been a dream of the Left for a while now. Such an arbitrary number. Why not $50? Why not $100? If the goal is to “lift people out of poverty”, the higher the better, right?
Not really. This kind of mandate would result in more people earning $0 an hour. Heritage Foundation President Kay James says, “Government-imposed minimum wages are a bad idea to begin with.”
COVID-19 concerns and restrictions have resulted in tremendous economic devastation. Mrs. James warns: “A minimum wage increase could push many hard-hit businesses out of business.”
The federal minimum wage is now $7.25 an hour. A proposal to get it to $15 is part of the massive coronavirus relief bill being debated in Congress. The president really wants this but he’s facing opposition from key Senate moderates from his own party.
These lawmakers don’t want to further burden constituents already struggling to save their businesses and keep their jobs.
No industry has been hit harder by COVID restrictions than the restaurant business. Business Insider reports that, since the onset of the pandemic, 17% of US restaurants have permanently shut down — about 110,000 establishments. And many more are struggling.
The Heritage Foundation recently held an online forum for restaurant owners to explain their unique concerns about a federally-mandated minimum-wage increase.
They explained that, because servers and bartenders currently earn a very low minimum wage, employers are required to supply a tip credit in the event that tips don’t get the employee to the minimum wage. The president’s proposal eliminates that system, requiring that all employees be paid the federal minimum. Many establishments could not survive that. Servers would lose, as many customers would tip less or not at all.
Restaurants operate on low margins. Owners say, “There’s only so much you can raise your prices before you price yourself out of the market.”
Raising the minimum wage would harm those it’s supposed to help.