Higher labor costs push prices up, while fewer jobs and hours mean less money in workers’ pockets.
Increasing the cost of hiring an employee is an odd way of addressing the supposed affordability crisis. Yet some of the same people complaining about consumer prices are also celebrating the minimum-wage hikes set to take effect on Jan. 1.
The National Employment Law Project, a left-wing advocacy group, reports that 19 states and 49 cities and counties will mark the new year by implementing a higher wage floor for workers. Later in 2026, four more states and 22 local jurisdictions will follow suit. “As affordability challenges grow,” the report says, “NELP supports 2026 wage increases that move us toward a good-jobs economy, rooted in living wages for all.”
Advocates contend that minimum-wage hikes increase incomes and reduce poverty, but that depends. The government can force an employer to pay a minimum hourly rate, but it can’t force the employer to hire someone in the first place, or to guarantee current employees a certain number of hours. Minimum-wage workers who keep their jobs and who retain the same number of hours benefit from an elevated minimum wage. But some employees will be let go, others will see their hours trimmed, and still others will never be hired because they’ve become too expensive to employ. These are only some of the trade-offs involved in increasing the minimum wage.
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Jason L. Riley is a senior fellow at the Manhattan Institute, a columnist at The Wall Street Journal, and a Fox News commentator. Follow him on Twitter here.
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