Biden push for higher minimum wage gaining momentum

Raising the minimum wage

If the minimum wage proposal is passed, it would mean a minimum $31,000 salary for workers. But can we afford it?

HOUSTON - By raising the minimum wage to $15 per hour, President Joe Biden hopes to drastically improve the livelihoods of 32 million American workers.

But critics have argued that even a pay boost phased in over five years will cripple many small businesses still reeling from the pandemic.

In fact, the Congressional Budget Office projects a net loss of 1.3 million jobs as employers jettison staff to compensate for the higher minimum pay rate for the workers they keep.

But Dr. Dietrich Vollrath Chairman of Economics at the University of Houston disagrees.

"I think that number is a little overstated," said Vollrath who contends the latest evidence indicates the economic impact of substantially raising the minimum wage is far less severe than previously thought, because workers making higher wages are far more productive, conscientious and remain on the job longer.

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"They (employers) spend less time trying to find good employees and they are spending more time with the employees they already have doing a good job, so on net, it does not necessarily increase wage costs for a lot of businesses," said Vollrath.

Vollrath also points out workers making a higher wage no longer have to lean on government programs to make ends meet.

"We essentially are paying people to work as opposed to not working, " said Vollrath.

And yet Congressional representatives on both sides of the aisle are getting an earful from business owners struggling to remain financially viable and fearful the weight of additional payroll will push them under.

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Representative Lizzie Fletcher has supported a minimum wage increase in the past and believes gradually raising the pay of those making the least is long overdue.

"I do think it's really important that we think about the folks who are earning that minimum wage. Many of them are the essential workers that we have all been relying on during this pandemic to stock the grocery store shelves or check us out or make sure places are clean," said Fletcher.

FOX 26 spoke with two small business owners who agreed that higher wages, if mandated, will be passed onto customers.