Democrats are pushing major minimum-wage increases after their midterm victories, but economists warn the proposals could come with unintended consequences for small businesses and inexperienced workers.
Pennsylvania Gov. Josh Shapiro is pledging to more than double his state’s $7.25 minimum wage, while Illinois Gov. JB Pritzker is calling for a federal increase as Democrats make affordability a central part of their governing agenda.
The renewed push comes as Seattle, which has one of the nation’s highest minimum wages, faces concerns about rising business costs and employment opportunities — raising questions about the tradeoffs of higher wage mandates.
“We’re going to more than double Pennsylvania‘s minimum wage,” Shapiro wrote in an X post this month. “Codify abortion rights into our state Constitution. Fund mass transit. Build more housing. These are the commonsense things that Pennsylvanians want done.”
“And with a Democratic trifecta, we will deliver on all of them,” he continued.
Shapiro’s proposal would raise Pennsylvania’s minimum wage from $7.25 to $15 an hour, an increase of roughly 107%, prompting questions about how small businesses would absorb the additional labor costs.
Tom Savidge, an economist with the American Institute for Economic Research, warned in an interview with Fox News Digital that steep wage increases could force small businesses to raise prices, reduce workers’ hours or cut back on hiring.
“A federal minimum wage hike will worsen the affordability crisis,” Savidge told Fox News Digital. “A one-size-fits-all mandate ignores regional differences in wages and business costs. It risks higher prices, fewer hours, and fewer jobs, especially for inexperienced workers. Politicians can mandate higher wages, but they cannot mandate that businesses can afford to pay them.”
Ireland Owens, FoxNews