The Raise the Unemployment Rate Act
Certainly, most people recognize the importance of ensuring a competitive and fair wage for hardworking Americans, and I strongly support finding solutions to help job creators in communities across the nation and in Oklahoma do just that. Last week, House Democrats tackled legislation to significantly raise the federally-required minimum wage. Unfortunately, the legislation they proposed and passed in the House is misguided and would cause more harm than good for the very people it aims to help, especially in states like ours.
H.R. 582 would increase the current minimum wage from $7.25 per hour to $15 per hour over five years. That’s effectively a rate increase of 107 percent. While I don’t doubt the intentions of my Democratic colleagues, the proposed wage increase is unprecedented for a country as large and diverse as the United States. Never in our history, or indeed in the industrialized world, has the minimum wage been increased so drastically in such a short amount of time.
Quite frankly, this policy ultimately amounts to Democratic politicians in Washington telling state and local governments – along with the people who elect their officers – that they know better. Make no mistake, states and municipalities have the power to raise the minimum wage within their jurisdiction. In fact, some states have already done just that. But the cost of living and doing business in Duncan, Oklahoma versus somewhere like New York City is extremely different and hardly comparable. Simply put, it doesn’t make sense to impose such a massive across-the-board minimum wage increase.
The impact on communities and the economy would be noticeable and extreme. A recent Congressional Budget Office (CBO) report showed that as many as 3.7 million jobs – the approximate population of Oklahoma – could be lost nationwide. According to the Employment Policies Institute, if H.R. 582 were to become law, nearly 38,000 jobs would be lost in Oklahoma next year. Of those jobs retained across the country, hours would likely be reduced considerably. Moreover, CBO projected that total family income would actually decrease $8.7 billion by 2025. Beyond lost jobs and income, the price of goods would undoubtedly increase – an impact felt everywhere by everyone.
Meanwhile, the economy is booming thanks to the economic freedom that Republican policies have provided to markets, job creators and workers. The Bureau of Labor Statistics found that as of June, employment was at a near 50-year low of 3.7 percent, and wages continued to grow at a year-over-year rate of 3.1 percent, which is the highest such rate in a decade. As demonstrated by the recent economic gains, we don’t need to trade wage increases for some at the expense of others’ livelihood.
Artificially raising wages may sound like a good idea without any context of the proposed strategy. Sadly, the Democrats’ “Raise the Wage Act” would be much better described as the “Raise the Unemployment Rate Act.”