$15 Minimum Wage Would Boost Incomes, Trigger Job Cuts

While
raising the federal minimum wage to $15 per hour would raise pay for roughly 27
million workers there are also drawbacks to this highly talked about decision.  Unfortunately it could lead to over 1 million
job losses countrywide, according to Congressional Budget Office projections.  The Raise the Wage Act is scheduled for a
vote in the House of Representatives later this month, and could raise the
minimum wage as soon as 2024.  It has
been since 2009 that we have had a federal minimum wage of $7.25, although a
few states have since raised above that level.
This bill was introduced by Rep. Bobby Scott, D-Va., and would
completely eliminate lower wages permitted for workers under the age of 20,
workers with disabilities, and tipped workers.
Those who are against the raise proposal have stated that it would be
far too expensive for small-business owners, and that it is not realistic given
the wide disparities in cost-of-living throughout the United States.  Rep. Terri Sewell, D-Ala., has been working
on a proposal to fix this problem.  She
is looking to introduce a tax credit for small businesses to help them absorb
the increase.

According to
the Congressional Budget Office this raise would have a two pronged effect on
low-wage workers in the United States.
The first part would be that both earnings and family income would
increase, helping lift families out of poverty.
The second and more unfortunate effect is that many low-wage workers
would become jobless thus dropping their families income and forcing them to
fall below the poverty threshold.
Overall job losses could rise to about 3.7 million if this minimum wage
increase was put into action.  At the same
time though roughly 17 million people would get a boost in their pay during an
average week in 2025.  This would move
the annual income for 1.3 million people above the poverty line.  With that being said, this increase would
reduce business income and certainly raise prices for consumers.  

There are
pros and cons to every decision made in Congress.  What they have to do is find a balance
between each that would benefit as many Americans as possible while hurting as
little as possible.  Obviously a decision
that would hurt no one is impossible, so we must take into consideration what
downfalls could come from raising the minimum wage.  Do the benefits outweigh the risks?  That’s the all-important question Congress
must deal with at this time.  At Converge
HR Solutions our skilled professionals have the ability to help ease the
transition if this bill were to pass.  We
are here to help.  Reach out to us at
(610)-296-8550 or info@convergehrsolutions.com if you have any questions regarding
the potential rise of the minimum wage and how it may affect your company.

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