The plan on the table in Congress would raise the federal minimum wage above $10 an hour (which is higher than all existing state rates). Obamacare’s mandate on employers, however, is already scheduled to raise the hourly cost of hiring a full-time worker past $10 an hour.
The idea behind a minimum wage is to help low-income workers. But Obamacare’s mandates will hurt the job prospects of these very workers—and raising the federal minimum wage would further limit the number of jobs available.
Combining federal (or state) minimum wage rates, payroll taxes, unemployment insurance taxes, and soon Obamacare’s employer mandate, employing a worker full-time will cost a minimum of $10.30 an hour. The government has made hiring more costly without raising workers’ pay.
Unfortunately, this will make entry-level jobs harder to get. And these jobs are important. For the majority, they are stepping stones to higher pay and higher-skilled positions.