More than ever, West Virginia needs jobs, not another unfortunate Washington policy that will take them away.
As a longtime West Virginian, I am deeply invested in building a bright future for our State. My organization, The Cardinal Institute, was founded with the mission of promoting the economic freedoms that allow Western Virginians to prosper. A federally-imposed minimum wage of $ 15 will do the opposite – cutting job opportunities and essential earnings, as employees and businesses are still reeling from the effects of the pandemic.
In March, Senator Bernie Sanders introduced the wage increase law – a proposal that would raise the minimum wage to $ 15 an hour nationwide for all employees. The senses. Joe Manchin and Shelley Moore Capito voted against the first time, but Democrats vow to bring her back to the vote.
West Virginia’s minimum wages and tip are both higher than the current federal standard, and further increases would have drastic effects for workers struggling to recover from losses caused by the pandemic. In April 2020, West Virginia lost 44% of jobs in the accommodation and food services industry, which is still below pre-pandemic employment levels. Economists at the Universities of Miami and Trinity estimated that passing the wage increase law would result in the loss of an additional 12,331 jobs in West Virginia.
One of the most harmful elements of the Wage Raising Act is its provision that would eliminate the federal tip credit and set the minimum wage for restaurant workers who earn tips at $ 15. Economists predict that more than 5,400 of West Virginia’s total job losses would fall in the hospitality industry, and nearly 30% would fall on savvy workers. Doing more than doubling the minimum wage across the country will hurt states and businesses with widely varying costs and margins. For example, Rachel Greszler of the Heritage Foundation estimated that a federal minimum wage of $ 15 in Mississippi would equate to a minimum wage of $ 22.44 in New York State and $ 35.74 in Washington, DC. . A similar calculation takes into account the relative impact on West Virginia.
If anything, New York’s experience with a minimum wage of $ 15 should be a cautionary tale. When the Big Apple raised their minimum wage to $ 15 and cut their tip credit, restaurants collapsed. A year after a statewide wages board raised the minimum wage by more than 50%, Census Bureau data revealed that more than 500 New York restaurants had closed.
For workers who don’t lose their jobs because of this policy, restaurant workers fear losing their tip income, which often puts more money in workers’ pockets.
The 470 percent “to raise” at a fixed salary of $ 15 could lead to a pay cut for peak workers in West Virginia. In New York City restaurants that went from tipping to a fixed minimum wage of $ 15, workers said their total earnings had declined. A waiter reported that his annual take home pay had fallen by $ 10,000. My organization is committed to helping West Virginia rebuild its economy after the pandemic and come back stronger than before. But Washington’s policymaking – only informed by unsuccessful experiences in places like New York – won’t get us where we need to go and hurt our employees.
The senses. Manchin and Capito must continue to hold the line and protect Western Virginians from the bad policies that have already damaged New York. West Virginia should not look to government mandates, restrictions, regulations, and restraints like a federal minimum wage for prosperity, but rather to freedom, entrepreneurship, and innovation.
Garrett Ballengee is the Executive Director of the Cardinal Institute for WV Policy, a nonprofit open market research organization located in West Virginia.