For business owners in industries whose profit – or even viability – relies on filling positions with minimum wage workers, the possibility of a $15 an hour minimum wage is worrisome. Business leaders, or anyone concerned with the impact of a higher minimum wage, should take a look at a recent report by the Congressional Budget Office (CBO). Based on an analysis that examined the impact of a $15 an hour minimum wage, the report is a mixed bag. On the one hand, it found that such an increase would boost incomes, but it also determined that it would result in job cuts. The report also considered other minimum wage amounts, and other impacts, as well. (To skip straight to the analysis, click here.)
This analysis was performed to determine the projected impact of the Raise the Wage Act, legislation scheduled for a vote in the House of Representatives this month that would phase in a $15-an-hour wage by 2024. The federal minimum wage of $7.25 per hour has not changed since 2009, though many states, cities and counties have set their minimum wages higher.
The analysis noted that it did not consider any impacts other than employment and family income, excluding criteria ranging from social outcomes (crime) and health outcomes (depression, suicide, and obesity), as well as education outcomes like school completion and job training. Furthermore, its analysis did not calculate the impact that higher wages might have on family spending.
Nevertheless, the analysis is interesting for business owners to review. Understanding that a $15 minimum wage would result in a hardship for many business owners, Marathon will be monitoring the situation. We will report back if we learn of any further analyses being conducted.