This week, the House voted on H.R. 582, the Raise the Wage Act, legislation that would raise the federal minimum wage to $15 an hour. According to a recent report from the Congressional Budget Office (CBO), this nationwide increase would have devastating consequences for workers, families, and businesses. Overall, it would cost 1.3 million Americans their jobs, especially entry-level positions that provide unskilled employees the opportunity to gain experience. Keep in mind, each time the minimum wage goes up, employers must pay more in payroll costs, workers’ compensation insurance, and employee benefits. Pay must also be increased for workers already making the minimum wage, or making just above it, to ensure employee retention and production levels.
Below is information about the economic impacts seen in cities and states that have already increased their minimum wage, in addition to insight from prominent business leaders who have spoken out on the issue:
- Recently, Maryland became the sixth state to raise its minimum wage to $15 an hour after state lawmakers overrode Governor Larry Hogan’s veto of the legislation. This action follows Democrat Mayor Catherine Pugh’s 2017 veto of legislation that would have raised Baltimore’s minimum wage to $15. Prior to Maryland raising its minimum wage to $15 in March, the state’s minimum wage had already increased by 39% over the last four years. Increasing it to $15 dollars an hour adds another 48% increase to the cost of wages, massively increasing costs for Maryland’s small business owners.
- In Seattle, a 2016 minimum wage hike from $10 to $13 has come at a cost to its workforce. A study conducted on the law’s impact by the University of Washington concluded the state’s “second wage increase to $13 reduced hours worked in low-wage jobs by around 9%, while hourly wages in such jobs increased by around 3%. Consequently, total payroll fell for such jobs.” An additional study conducted by the National Bureau of Economy Research found a similar reduction in hours worked in low-wage jobs following the city’s increase to $13. There was also a significant reduction in the rate of new employees entering the workforce. In other words, job opportunities for those with no skills or no experience disappeared, and workers didn’t take home bigger paychecks.
Top business leaders including Bill Gates and Warren Buffet have also stressed that when it comes to raising the minimum wage, we must approach the issue with caution, because doing so requires a huge trade-off in terms of labor substitution and job destruction:
- “If you raise the minimum wage, you’re encouraging labor substitution and you’re going to go buy machines and automate things — or cause jobs to appear outside of that jurisdiction. And so within certain limits, you know, it does cause job destruction.” – Bill Gates, 2014
- “I may wish to have all jobs pay at least $15 an hour. But that minimum would almost certainly reduce employment in a major way, crushing many workers possessing only basic skills." – Warren Buffett, 2016
Even House Democrats are echoing the concerns of prominent business leaders and Republicans who feel this issue is best handled at the state level:
- “One size does not fit all. The cost of living is different in rural areas, towns, and large cities. A new federal wage should take that into account.” – Congressman Kurt Schrader (D-Oregon)
- “Fifteen dollars may be right for California where I live and I’m fine with it. But it’s not right for Perry County, Alabama. A lot of the big companies would be able to handle this, but a lot of small companies would be adversely affected.” – Congressman Scott Peters (D-California)
Earlier this year, the State Legislature addressed Nevada’s minimum wage through a bill that will raise it at a graduated increase of 75 cents each year – beginning January 1, 2020 – until the minim wage reaches $12 an hour. When it comes to raising the minimum wage, a graduated increase that is relevant to a state’s industries and economy, as opposed to a one-size-fits all increase, is typically seen as a more reasonable approach.
Most importantly, 1/3 of Nevada’s workforce is paid by the hour, with many of these workers being employed by the hospitality industry where the majority of workers’ incomes are heavily dependent on gratuities. Since the House-passed bill seeks to increase the current minimum wage for hourly tipped employees to $15 an hour, workers in the restaurant, hotel, and gaming industries would be significantly impacted, as their employers would be forced to balance a nearly 600% minimum wage increase with tipped wages – which in most cases, is already considered a substantial income. The fact that tipped wages weren’t given any thought is concerning, especially considering the impact a minimum wage increase to $15 has had on tipped workers in cities across the country. Los Angeles, New York City, and San Francisco, have all experienced job loss and a reduction in hours after implementing a $15 minimum wage increase. This history is not partisan, it’s simply the reality of the situation. Disregarding tipped wages in a minimum wage increase bill that assumes a one-size-fits-all approach is the answer is not something I can support.
Washington Visitors:
It’s always nice to see familiar faces while I’m in Washington. Below are some of the Nevadans I recently met with. Thanks for stopping by!
Nevada Educational Theatre Association
Nevada Governor’s Office of Economic Development
Nevada State Science Teachers Association
Parents for Online Education
Washington Wrap-Up:
This week, the House voted on the following resolutions:
H.Res.489
On Tuesday, the House passed a resolution to condemn a ‘tweet’ from President Trump directed at Members of Congress. I voted against this legislation because I have been consistent in my refusal to enter social media battles which are based largely on personalities. I did not do it when people were arguably critical of the Jewish faith or referred to the sitting President as a “M-F’er”, and my refusal has been applied equally regardless of who the source of communication is. My energies and use of congressional resources will continue to focus on people’s health care, people’s immigration statuses, veterans, jobs, the economy, our troops, natural resources, and infrastructure.
H.Res.497
Continuing the latest trend of Democrat leaders using the House Floor for pure messaging purposes, this week they chose to hold a contempt vote against Attorney General William Barr and Commerce Secretary Wilbur Ross.
It’s incredibly frustrating that week after week, constituents continue to call my office asking when we’re going to pass legislation to reform our nation’s immigration system, do something to ensure people have access to affordable health care, and take action to ensure pre-existing conditions are protected. It’s the end of another work week in Washington and once again I have to go home to my constituents to say: no, we didn’t do something to ensure our fiscal house is in order, we haven’t done anything to properly secure our borders, and we certainly haven’t done much of anything on the issues that are most important to Nevadans and their families. Instead, we wasted more time and energy voting on symbolic resolutions that are nonbinding.
I challenge my Democrat colleagues in the House to see what happens when they put their energy into what people are for rather than what they are against. You can rest assured that I will continue to be “for” the issues and support legislation that achieves real solutions for the American people.
S.J.Res. 36 - A joint resolution providing for congressional disapproval of the proposed transfer to the Kingdom of Saudi Arabia, the United Kingdom of Great Britain and Northern Ireland, the Kingdom of Spain, and the Italian Republic of certain defense articles and services
S.J.Res 37- A joint resolution providing for congressional disapproval of the proposed export to the United Arab Emirates, the United Kingdom of Great Britain and Northern Ireland, and the Republic of France of certain defense articles and services
S.J.Res. 38 - A joint resolution providing for congressional disapproval of the proposed export to the Kingdom of Saudi Arabia and the United Kingdom of Great Britain and Northern Ireland of certain defense articles and services
I voted against each of these joint resolutions because they are an attempt to block prior, legal U.S. arms sales to strategic partners facing increased threats from Iran and its terrorist proxies. These resolutions would negatively affect our NATO Allies and have unintended consequences for defense procurement with our partners.
As you may know, recently, the Administration exercised emergency authority under the Arms Export Control Act to expedite 22 arms sales. In explaining the use of the emergency authority, the State Department cited Iran’s increase in threatening activity against both the U.S. and our partners, and the need to build partner self-defense capacity. This emergency authority has been previously used by both Republican and Democrat administrations.
The defense articles and services in question will deter Iranian aggression and ensure our strategic partners in the Middle East have the capabilities necessary to defend themselves against the Iran-backed Houthi insurgency in Yemen, an Islamic religious-political-armed movement that has launched rockets, UAVs, and maritime attacks against the United Arab Emirates and Saudi Arabia, and continue to threaten their citizens, critical infrastructure, and military targets in locations where many Americans are present.
It is critical the U.S. remain a reliable security partner, especially as Iran continues to escalate its threatening behavior in the Middle East. Additionally, the Pentagon has noted that blocking these sales could create an opportunity for exploitation by competitors and adversaries. The U.S. must remain a reliable partner and prevent our adversaries, such as Russia or China, from becoming the supplier of these weapons, because our foreign adversaries will not place the same premium on human rights or the reduction of civilian casualties that the United States has prioritized while working with the Saudi-led coalition.
As always, thank you for subscribing to the Amodei Report. I look forward to continuing to keep you up to date on the issues you care about most. For additional information, please visit my website at amodei.house.gov or call my Washington office: (202) 225-6155, Reno office: (775) 686-5760, or Elko office: (775) 777-7705. To receive updates on what I am doing in Washington and in Nevada’s 2nd District follow me on Facebook, Twitter, Instagram, and YouTube.
