Though many economists favor a minimum wage increase, the debate is far from settled.
Michael Saltsman is an economist and managing director with the Employment Policies Institute, a think tank based in Washington, D.C., that promotes fiscally conservative public policy. Saltsman warns that if the federal minimum wage does go up to $15, as President Biden has proposed, small businesses might be inclined to lay off workers to offset the extra cost of employment.
SEE MORE: How A Minimum Wage Increase Could Help The Economy, Even In A Pandemic
“I think you have to look at when you increase an employer’s costs,” Saltsman told Texas Standard. “Even in good economic times, how do they offset that cost? And if they can’t offset it through higher prices on customers, then what other steps do they have to take?”
What you’ll hear in this segment:
– How the restaurant industry could be hit particularly hard by a wage increase during the pandemic
– Who should bear the burden of reducing poverty
– Other possible negative side effects of a wage increase