In the upcoming 2020 presidential elections, raising the federal minimum wage from $7.25 to $15 by the year 2026 has been one of the hot topics of discussion rattling the political circle.

Though twenty-nine states and numerous counties have minimum wages higher than the federal rate, the current rate has not changed since 2009. Some of the reasons raised were increased job loss, reduction of business profits and increased consumer prices. Furthermore, enacting this new initiative will particularly affect small business owners.

The Congressional Budget Office (CBO) said that if the federal minimum wage was raised to $15, 1.3 million workers would lose their jobs. Most businesses would need to fire some employees due to the increased expense. Ultimately, profits will be reduced, and consumer prices will have to increase to compensate for this new expense.

As a result, new proposals were submitted to raise the federal minimum wage to $10 and $12 per hour instead of $15. Nonetheless, these options brought about the same results but on a smaller scale.

Alfredo Ortiz, president and CEO of the Job Creators Network, said the CBO findings “confirms what we already know to be true—broadly raising the minimum wage to $15 an hour will reduce employment opportunities and is bad for business. The consequences will be especially brutal for small businesses, which already operate within razor-thin budget.

Furthermore, other opponents have said it would burden small-business owners with increased operating costs and have negative ramifications for the very workers it’s supposed to help. Others say a nationwide minimum-wage rate is not realistic, given the wide cost-of-living disparities across the United States.

Nonetheless, labor market economists disagree about what the consequences the $15 minimum wage would be for U.S. workers and employers. They argue that the $15 an hour rate is closer to a living wage. They say that if the minimum wage had kept up with inflation, it would now be closer to $20 per hour.

While the Democratic Party presidential nominee Joe Bidon supports this initiative, the republican party have generally opposed this increase. President Trump has shown mixed feelings on this topic.  In 2019, President Trump said he was open to a federal minimum wage of $15 per hour but then opposed House legislation that raised the rate.

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