Rigorous economic research has long shown that raising the minimum wage results in job loss for the least-skilled employees. A recently released report from the non-partisan Congressional Budget Office (CBO) details that raising the minimum wage to $10.10 will reduce job opportunities for the least-skilled—the potential job losses range from 500,000 to one million jobs. This would come at a time when unemployment for young adults has already been above 20 percent for more than five years.
A new commercial by the Employment Policies Institute (EPI) illustrates in real terms the consequences of a higher minimum wage: From disappearing grocery store cashiers to diners who can order their own food, a higher minimum wage forces employers to seek less-costly automated alternatives when customers are unwilling to pay higher prices.
Even Microsoft co-founder Bill Gates has warned that a higher minimum wage could spur employers to “buy machines and automate things.” It’s a trend that’s happening already, and will accelerate further if President Obama and his supporters get their way on a $10.10 minimum wage.