In an effort to implement President Joe Biden’s campaign promise for a $15 federal minimum wage, Democrats are attaching a measure to the $19 trillion economic relief package meant to help Americans hurting from the financial impact of the coronavirus pandemic. 

In the past, President Biden has claimed, “There is no evidence that when you raise the minimum wage, business has gone out of business.”

Doubling down on Tuesday, Biden tweeted, “It’s long past time we raise the minimum wage to $15 an hour. The American Rescue Plan will get it done.”

In addition to raising the federal minimum wage to $15 per hour, his plan would end the tipped minimum wage and sub-minimum wage for people with disabilities. But is it wise to implement these measures with so many Americans still struggling from the pandemic?

“With the economic divide, I mean, I want to see a $15 minimum wage. It should actually be $20.”
-Democratic Rep. Rashida Tlaib, D-Mich.

False. Completely make believe.

In the middle of the pandemic, with so many workers still unemployed, entire industries teetering on the edge of collapse, and hundreds of thousands of businesses closed forever, a costly $15 federal minimum wage would hurt the people Biden is trying to help. Businesses need relief and to reopen, not more economic hardship.

The hardships associated with raising the federal minimum wage would come in many forms:

Job Losses

The nonpartisan Congressional Budget Office (CBO) estimated that a $15 per hour federal minimum wage would kill 1.3 million to 3.7 million jobs, even as it raised wages for millions of workers. Another estimate pegs losses even higher at 7 million full-time jobs. Most literature on the subject of minimum wage increases agrees that they reduce employment. Nearly doubling the federal minimum wage from its current level of $7.25 per hour would make it more expensive for companies to hire and retain their lowest-skilled workers at a time when many are struggling to keep their doors open.

Reduced Hours and Benefits

Employers could forgo hiring new workers and lay off current staff, but that’s not all. They may also reduce staff hours and cut benefits well as raise prices on the goods and services they provide to consumers, which would add to household economic suffering.

A Move to Automation

In addition, businesses may also invest in automation and technology to replace workers. All of this makes it more difficult for inexperienced workers to build skills and gain valuable experience.


Although it’s true that millions of workers would benefit from higher wages, and perhaps a million families would move out of poverty, many others would lose incomes, lose businesses, and lose jobs. Moreover, the nonpartisan CBO projected Monday that the U.S. economy will bounce back to its pre-pandemic size by the middle of the year without any emergency stimulus. To implement a policy that would bring more economic hardship to small businesses already struggling to keep their doors open might be well-intended, but would have devastating consequences for workers and the economy.