Socialist Vermont senator Bernie Sanders's proposal to raise the minimum wage to $17 an hour and eliminate the federal tip credit would kill about 1.7 million jobs and ruin restaurants, according to a new report.
The Employment Policies Institute in a July report found that Sanders's wage hike proposal, which the far-left senator introduced on Tuesday, would prompt more than 1.2 million lost jobs nationwide. Sanders's bill also eliminates the tip credit, which allows employers to include some of their workers' tips as part of their wage—that policy would slash another 447,000 jobs, according to the report. Hospitality industry workers would bear 40 percent of the job losses, while 62 percent of the predicted lost jobs are held by women.
Sanders's proposal comes as restaurants and bars recover from pandemic-era closures and sky-high food costs, issues that have forced tens of thousands of eateries nationwide to close. Many restaurant owners say eliminating the tip credit would cause even more chaos. Eighty-five percent of Washington, D.C., restaurant owners, for example, say the policy would force them to lay off workers, according to a recent Employment Policies Institute survey.
Sanders nonetheless wants the entire United States to follow D.C. mayor Muriel Bowser's (D.) decision last month to unveil a $17 minimum wage. For Employment Policies Institute research director Rebekah Paxton, doing so would crush local businesses.
"This bill is a recycled version of Sanders's ill-conceived $15 wage proposal, which was shot down by a bipartisan group of senators in 2021," Paxton said in a statement. "Nobody should support this proposal that only stands to hurt businesses and their employees."
Sanders's office pointed the Washington Free Beacon to a Tuesday statement touting the wage bill and did not return questions on whether it would kill jobs. Sanders has threatened colleagues who refuse to back the proposal. In May, two months before he formally unveiled the proposal, he warned his fellow senators they will face "political consequences" if they don't vote to raise the minimum wage. In 2021, however, eight Senate Democrats opposed Sanders's bill to raise the federal minimum wage to $15 an hour.
Three of those Democrats—West Virginia's Joe Manchin, Montana's Jon Tester, and Arizona's Kyrsten Sinema, now an independent—face difficult reelection bids in 2024 and could again reject a minimum wage hike. Manchin has voiced support for an $11-per-hour minimum wage, a modest hike compared with Sanders's proposal.
In addition to D.C.'s wage hike, California earlier this month resurrected a long-defunct commission that allows the state to set wage hikes in certain industries. While the California Legislature defunded the Industrial Welfare Commission in 2004, a budget bill that Democratic governor Gavin Newsom signed on July 10 revives the regulatory board. The commission has the power to set wages at fast-food restaurants and other franchises—power that critics say will be used to push unsustainable minimum wage hikes.
"To put it bluntly, this commission could micromanage the operations of every small business franchise in California," Republican state legislator Vince Fong told the Free Beacon after Newsom signed the budget. "The business climate in California was already bad, and this makes it worse—if that's even possible to imagine."