Montgomery County Minimum Wage Hike Will Cost 47,000 Jobs, $396.5 Million Lost Income
It seems like the evidence is never ending on how minimum wage hikes harm the economy.
We’ve previously written about how minimum wage hikes cost Seattle millions of labor hours and thousands of jobs. Additionally, research shows that Ontario would have similar results, with the policy disproportionately harming immigrants.
Basic research out of Harvard also shows how minimum wage hikes actually harm the poor (the intended beneficiaries of such polcies). They also provide a very simple mechanism which we have previously explained:
The idea was that after minimum wage hikes, restaurants would die off, thereby decreasing job opportunities. The researchers discovered that for ever $1 increase in the minimum wage, there was a 4-10% decrease in employment—restaurants indeed closed down. Basically, higher minimum wages hasten the business’ “shutdown” point—it eats their profit margins. Of course, this means that less-profitable, local businesses, are hit harder than large corporate chains by minimum wage hikes.Article Continues Below
Given this, it’s no surprise that new research out of Maryland shows that a minimum wage hike to $15 (an arbitrary number) would severely cut the number of low wage jobs available. In just Montgomery Country alone, 47,000 jobs would be cut by 2022 if they were to go ahead with their minimum wage bump.
This is a big hit to the county with a population of just over a million people.
Further, the study found that the wage hike would cause a $396.5 million loss of income to Montgomery County due to lay offs, cut hours, reduced benefits, and lack of new hires. Overall, the study found that the economy would be worse off because of the minimum wage hike.
The study was commissioned by Montgomery Country Executive Isiah Leggett (D), who himself previously vetoed a minimum wage hike citing devastating effects on the local economy.
Looks like he may be right.