Trust the Experts: Economists Across Board Say Min Wage Hike Would Spike Inflation

Shuttered small businesses, San Francisco / Getty Images
April 27, 2022

Economists nationwide oppose Democrats' efforts to raise the federal minimum wage to $15, saying it would increase inflation and hurt small businesses, according to a survey provided exclusively to the Washington Free Beacon.

Eighty-one percent of economists said a $15 minimum wage would have a "negative impact" on businesses with fewer than 50 employees, while 58 percent said it would contribute to record-high inflation, according to the survey conducted by the Employment Policies Institute. Of the 160 economists polled, 62 percent said they oppose a $15 federal minimum wage.

President Joe Biden in 2020 campaigned on the minimum wage hike, saying it would provide American workers the "dignity they deserve." Democratic leadership attempted to slip a $15 minimum wage into pandemic relief legislation last year but failed in the Senate after eight Democrats joined Republicans in opposition.

Nearly 80 percent of studies conducted since 1992 found that an increased minimum wage decreases the level of employment.

Michael Saltsman, the managing director of the Employment Policies Institute, said Democrats have pushed for a $15 minimum wage even as economists warn it will decimate jobs.

"This survey further solidifies the consensus that an extreme wage mandate is bad for both employers and employees," Saltsman told the Free Beacon.

Despite past opposition, swing-district Democrats in recent years have fallen in line to support a $15 minimum wage, the Free Beacon reported last year. One of these Democrats, Rep. Elaine Luria (Va.), came out in support of a $15 minimum wage just days after selling her small business.

Vanita Gupta, the third-highest ranking official in the Department of Justice, advocated for a $15 minimum wage while she owned $1 million in stocks in her father's company, which pays its Mexican workforce as little as $1.30 an hour.

While a majority of respondents said the federal minimum wage, which sits at $7.25, should be increased, only 17 percent said it should be $15 or higher. The economists also said poverty rates are more likely to increase than decrease if the minimum wage is hiked. More than 70 percent said it would reduce the availability of hospitality jobs and that an increase in the tipped minimum wage would reduce the number of service jobs.

Two-thirds of the respondents specialize in labor economics, with macroeconomics and international economics following as the second and third most popular areas of expertise. Carnegie Mellon University professor Lloyd Corder, who conducted the survey, said the findings show that there is still debate on the exact impact of an increased minimum wage but that economists generally "agree there are better alternatives to help boost income for families in poverty."