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Even some Democrats say a $15 minimum wage is too high

Rick Newman
Senior Columnist

The House of Representatives, controlled by Democrats, just passed a bill that would more than double the federal minimum wage, from $7.25 per hour to $15.

The bill has almost no chance of passing the Republican-controlled Senate and becoming law. That’s probably fortunate.

While the “fight for $15” has become a liberal rallying cry, even some Democrats acknowledge a minimum wage that high would hurt some businesses and probably kill some jobs. “In certain parts of the country—especially in rural areas – $15 an hour is not realistic,” Democratic presidential candidate John Hickenlooper told Yahoo Finance recently. “You have to regionalize it.”

Economists agree. The Congressional Budget Office found recently that raising the minimum wage to $15 by 2025 would boost pay for at least 17 million workers. But it would also kill 1.3 million jobs. The logic is straightforward: If companies must pay more for workers, their profit margins will shrink and some will hire fewer people. After Seattle raised its minimum wage in 2015 and 2016, researchers found that some workers ended up better off and a smaller portion ended up worse off.

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Hickenlooper’s floor for a suitable federal minimum wage is far below the level many of his fellow Democrats target. “In most places, they can get to $8, $9, probably $10,” the former Colorado governor says. “There are parts of Colorado where you would want to start out at $12. But right now, there are too many businesses at subsistence.”

Graphic by David Foster/Yahoo Finance

If Hickenlooper sounds sympathetic to business owners, that’s because he ran a string of brewpubs in Denver before winning election as mayor, then moving up to governor. He’s one of the most moderate of the twentysomething Democrats running for president, favoring a return to free trade, a limited expansion of government health care options and robust capitalism over creeping socialism.

Like some economists, Hickenlooper says a single national minimum wage level doesn’t make a lot of sense, given wide variations in living costs. “It can’t be a blanket,” he says. “Sometimes the federal government gets into this notion that one size is going to fit all. I don't think you want to put a huge burden on small businesses that are already having a pretty stiff challenge competing with these massive corporations.”

Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman

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