A liberal group in my home state of Virginia recently called on the Virginia General Assembly to increase the minimum wage to $15 per hour.
This call is not unique to Virginia. The “Fight for $15” campaign is spreading throughout the country at a rapid rate and needs to be stopped.
The misguided campaign says it wants to “boost the wage floor for hardworking men and women.” But if it succeeds, it will only push the job creators who employ those people out of business.
As a small business owner with years of experience managing my business in Virginia, I know firsthand that when lawmakers create legislation that forces employers to increase employees’ hourly pay via mandate, it ultimately leads to reduced hours, business closures, and job losses.
Advocates for increasing the minimum wage claim a boost in pay for the lowest-paid workers will enable them to have a “living wage.” Their slogans may sound promising, but their proposed solution is counterproductive.
Many economists have studied state and local minimum wage increases throughout the country, concluding that minimum wage hikes actually lead to job losses and reduction of hours, especially in industries with the lowest-paid employees.
The Fight for $15 campaign successfully lobbied California into increasing its minimum wage to $15 an hour by 2022. But researchers from the Employment Policies Institute found that by 2022, when the increase is fully phased in, an estimated 400,000 jobs will be lost.
Seattle’s minimum wage experiment has been similarly destructive, leaving slashed hours and lower take-home pay in its wake.
One thing is clear: When the government forces employers to give their employees a raise, deserved or not, they’re left with fewer resources and forced to make difficult decisions.
I love my business, and I love my employees even more. And when business is doing well and employees are succeeding at their jobs, I give them a well-deserved raise.
I choose to do this when my business has the funds to do so, but if the government forces me to increase employee pay when times aren’t so good, it puts me in a tough position. I could even have to let some employees go—not because they’re bad employees, but because I can no longer afford them.
Job creators know better than legislators what’s best for business. And, speaking as one, the best way to incentivize business owners to invest in their employees is by lowering their tax burden, which is exactly what the Republican tax cuts accomplished.
It’s Economics 101: More money in the hands of small business owners means more money in the hands of their employees, their families, and the local economy.
Over 300 businesses throughout the country have used their tax savings to reinvest in their business by voluntarily giving their employees raises and bonuses. According to Americans for Tax Reform, more than 3.5 million individuals have already benefited from tax cuts, which remain a more powerful economic tool than any government mandate.
Additionally, the tax plan has incentivized many job creators to expand their business and hire additional employees.
Apple has already announced that it will be hiring over 20,000 employees over the next few years.
And Nexus Services in my state of Virginia announced not only will it raise all employees’ wages by 5 percent, but the company will also hire an additional 200 employees, doubling its size.
These are just two examples of hundreds of businesses where jobs are created through market incentives, not the heavy hand of government.
The Republican tax plan has done more good for American workers than any minimum wage increase ever could.