(p. A2) Opponents of a large increase say policy makers should be especially concerned with job losses in low-wage industries, such as the leisure and hospitality sector, which shed 3.8 million jobs last year.
More than 37% of workers who earned the federal minimum wage in 2019 were employed in restaurants, hotels and other parts of the hospitality sector, according to the Labor Department. Retail workers accounted for nearly 23% of minimum-wage earners, and education and health employees, including home health aides, represented 14%.
“It’s a potentially catastrophic policy error,” Kevin Hassett, former President Donald Trump’s top economic adviser, said of the $15 minimum wage. The pandemic, he said, pushed many small businesses to the brink of bankruptcy, but those restaurants and other firms are holding on, expecting profits later this year when the economy can open up. A minimum-wage increase would cut into those expected profits and cause businesses to close, he said. “It’s going to cost a lot of people their jobs.”
Mr. Hassett said low-wage workers have been disproportionately harmed by the pandemic, and that the government should support them through direct payments rather than mandating that private firms raise wages.
The nonpartisan Congressional Budget Office found in a 2019 study that raising the federal minimum wage to $15 an hour by 2025 could cost 1.3 million Americans their jobs. The same study found the higher level could boost the pay of about 27 million workers and lift 1.3 million Americans out of poverty.
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(Note: the online version of the story was updated February 3, 2021, and has the title “Biden Wants a $15 Minimum Wage. Here’s What People Say It Would Do to the Economy.” The penultimate sentence quoted above, appears in the online, but in the print, version.)
The nonpartisan Congressional Budget Office study mentioned above is: