Small Businesses Stand to Lose the Most in the “Fight for $15”

In his 2013 State of the Union, President Obama called for a 25 percent increase in the federal minimum wage, to $9 an hour. Five years later, and the Democratic Party is demanding a minimum wage increase of more than 100 percent, to $15 an hour.

The Service Employees International Union (SEIU) popularized the figure in 2012 as a part of an over $100 million campaign, the “Fight for $15.” The catchy sounding figure might make for good politics, but it has no basis in economics. According to a candid comment from an organizer with the union: “Ten dollars was too low and $20 was too high, so we landed at $15.”

In 2014, the nonpartisan Congressional Budget Office (CBO) estimated that 500,000 jobs would be lost nationwide if the federal minimum wage were raised to $10.10, and 100,000 would be lost if it were raised to $9.00. Economists from Miami and Trinity Universities, using the CBO’s methodology, found that a $15 minimum wage would wipe out up to 2 million jobs by 2020.

A new ad, created by The Employment Policies Institute and placed in The Hill, highlights the increased prices, cut hours, and business closures that follow in the wake of minimum wage hikes.

For more stories on dozens of businesses who have struggled with rising labor costs due to minimum wage mandates, visit Facesof15.com.

While the SEIU may think that a $15 federal minimum wage is not radical, business owners who disagree with the union have historical precedence on their side. Since the federal minimum wage was established in 1938, it has been an average of $7.40 an hour after adjusting for inflation, slightly higher than the current federal standard of $7.25Since the last increase in the federal minimum wage was fully phased-in in 2010, both the number and percentage of people earning it has fallen every year, as employees earn raises through their own initiative.