House OKs Minimum Wage Hike

July 25, 2019

The House voted on Thursday, July 18 to approve legislation which would increase the federal minimum wage. The Raise the Wage Act, (H.R. 582) would increase the federal minimum wage gradually over six years to $15 per hour. 

Three Republicans — Reps. Brian Fitzpatrick (Pa.), Francis Rooney (Fla.) and Chris Smith (N.J.) — voted in favor of the bill while six Democrats — Reps. Anthony Brindisi (N.Y.), Joe Cunningham (S.C.), Kendra Horn (Okla.), Ben McAdams (Utah), Kurt Schrader (Ore.) and Xochitl Torres Small (N.M.) — voted against it. 

In addition to the phase-in modification, the final bill included language requiring an economic impact study of the first two wage increases outlined by the legislation.

According to the Congressional Budget Office, the bill is estimated to boost wages for 17 million workers. At the same time, the CBO projects that in an average week in 2025, 1.3 million otherwise-employed workers would be jobless if the federal minimum wage went up to $15. That’s a median estimate. Overall, CBO economists wrote that resulting job losses would likely range between “about zero and 3.7 million.”

Thus, lawmakers’ well-intended efforts to increase the federal minimum wage will likely cause a hardship for many small firms, particularly those in highly competitive industries, and could lead to reduced work-hours, lay-offs and stalled small-business growth. To offset higher employee wages, small businesses may need to raise their prices on the goods and services they sell. This can lead to decreased sales, decreased revenues and lower profits. With less money to spend, small-business owners may have to decrease or eliminate capital improvements, marketing, new hires, bonuses, debt service and production.

The legislation is not expected to go anywhere in the Republican-controlled Senate.
