Is a Federal Minimum-Wage Hike Good for Business, or Does It Cost Too Much

Congressional Democrats' recently announced plan to raise the federal minimum wage has reset the stage for an enduring argument: Do minimum-wage increases lead to more prosperity or fewer jobs for low-wage earners? Democrats in the House and Senate introduced legislation Jan. 16 that would gradually increase the federal minimum wage from $7.25 an hour to $15 an hour over the next five years. It would then be adjusted annually to reflect changes in the national median hourly wage. The bill would also gradually increase the base hourly wage for tipped workers ($2.13 an hour) and workers under age 20 ($4.25 an hour) to $15 by 2027 and end the subminimum wage system used by some employers for workers with severe disabilities. It has been 10 years since the last increase to the federal minimum wage took effect.