Federal Government Estimates Show $15 Federal Wage Would Kill Jobs

This week during the Democratic National Convention, the party unveiled its official platform, which included raising the minimum wage up to $15 an hour by 2026 across the country.

Activists are also calling on Vice President Kamala Harris, if she wins in November, to eliminate the federal tip credit.

Yet the research consensus on the negative impacts of these policies hasn’t changed: three decades of research on minimum wage hikes finds “overwhelmingly negative” impacts on employment. A select handful of studies wage hike advocates typically use to support their policies have been debunked and don’t stand the test of time.

Even the nonpartisan Congressional Budget Office has issued recent estimates on how this policy could affect Americans. The results are not positive.

Using the CBO’s interactive Raise the Wage Act estimator, a $15 federal minimum wage paired with fully eliminating the tip credit could:

• Kill up to 1.1 million jobs;

• Plunge roughly 130,000 Americans into poverty; and

• Eradicate over $4 billion in real annual family income;

Using CBO methodology in 2022, Miami and Trinity University economists estimated the impacts of similar policies on each state:

Despite the feel-good politics, proposals to raise the federal minimum wage and eliminate the tip credit are estimated to have devastating effects on jobs and earnings for Americans. Lawmakers before and after the election should beware.