According to a report from nonprofit research group Employment Policies Institute (EPI), California's plan to raise the state minimum wage to $15 an hour by 2023 will cost the blue state some 400,000 jobs. Moreover, low-paid workers will be hardest hit.
As reported by Fox News, EPI analyzed trends in employment from 1990 to 2017 to project the effect of a $15 state minimum wage. They found that with each 10% increase, California brought a corresponding 2% decline in employment. "The impact was larger, 5%, for lower-paid workers," notes Fox. "By those estimates, the EPI projects that the pending $15 minimum wage hike would cost California 400,000 private sector jobs, with heavy losses in both the foodservice and retail sectors."
Once again, the Left preaches "compassion" for the worker to create legislation that actually translates into a loss of hundreds of thousands of jobs, and an economic disaster, specifically for those they claim to care most about.
EPI said it's indisputable that “rising minimum wage has depressed employment opportunities in the most heavily-impacted industries.”
The new legislation will bump minimum wage from $10.50 an hour to $11, effective January 1, 2018, for businesses with at least 26 employees. Every year until 2022, the minimum wage will increase by $1 an hour. And those small business owners with less than 26 employees will be hit, too: the minimum wage will reach $15 an hour for their employees by 2023.
We've recently seen the effects of government forced minimum wage hikes in Seattle. As reported by The Daily Wire this summer, the city's $13 minimum wage mandate led to a drop of $1,500 in income for low-wage workers. The wage hike led to employers cutting back employees' hours.
Per the National Bureau of Economic Research:
Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.
In other words, the push to implement mandatory increases in minimum wage is not a win for the working man. And automation and new technology will likely compound such problems.
A new report from McKinseyGlobal Institute estimated a loss of some 73 million jobs in the U.S. by 2030, though researchers said economic growth via "rising productivity and other forces could more than offset the losses."
"In the U.S., 39 million to 73 million jobs could be destroyed, but about 20 million of those displaced workers can be shifted fairly easily into similar occupations, though they may take on slightly different tasks, the report says. That means 16 million to 54 million workers — or as much as a third of the U.S. workforce — will need to be retrained for entirely new occupations," noted USA TODAY.