AOC-backed $30 minimum wage plan could backfire in unexpected ways, experts warn

An ambitious proposal backed by Rep. Alexandria Ocasio-Cortez to raise the federal minimum wage to as high as $30 an hour is drawing red flags from economists who warn the proposal could backfire on the people it’s meant to help.

A new survey published by the Employment Policies Institute found broad skepticism among U.S. economists toward steep minimum wage hikes, with many warning the policy could lead to unintended ripple effects like job losses for low-wage workers and higher prices for all Americans.

Specifically, these economists oppose proposals that push the minimum wage to more than $20 an hour.

The findings come as progressive lawmakers, including Ocasio-Cortez, push for higher federal wage mandates to address rising costs of living. The federal minimum wage has not been adjusted since 2009 despite an annual average inflation rate of 2.57%, according to the Bureau of Labor Statistics.

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“We surveyed more than 160 American economists and for proposals over $20 an hour, 96% said they oppose it,” Employment Policies Institute Research Director Rebekah Paxton told Fox News Digital.

The findings reflect broader resistance to steep minimum wage hikes, with nearly three-quarters of economists opposing a $15 wage and opposition increasing sharply at higher proposed levels.

Paxton said this view cuts across political lines.

“The economists we surveyed spanned the political spectrum — Republicans, Democrats, Libertarians and those who didn’t identify with a party — but they broadly agree that raising the minimum wage above $20 an hour would be harmful for employees, businesses and American consumers,” she said.

Economists pointed to a range of potential downsides to raising the minimum wage from the current $7.25 hourly rate, particularly for lower-skilled workers. A majority said higher minimum wages would likely reduce job opportunities for young people, with up to 95% predicting fewer youth jobs at wage levels above $20.

Industries with thinner margins could be especially vulnerable.

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“Small businesses would likely have the hardest time adapting, but certain industries with tighter profit margins, like hospitality and restaurants, could be hit particularly hard,” Paxton said. “Economists told us it would reduce jobs and make it more difficult for those businesses to operate.”

Many respondents also warned businesses would react to rising labor costs by turning to automation. At higher wage levels, as many as 97% of economists said companies would replace tasks traditionally done by workers with robotic and other automatic means.

The survey highlighted concerns about inflation and the cost of living, with a majority of economists claiming higher minimum wages would increase prices of goods and services, with up to 84% predicting increased costs for consumers if minimum wages were raised to more than $20 an hour.

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“A lot of lawmakers and activists say affordability is the reason for proposing these high minimum wage hikes,” Paxton said. “But what we’re finding is that not only could this cost jobs and reduce hours, it could also increase automation and raise the cost of living.”

Small businesses, in particular, may struggle to absorb those costs. Nearly all economists surveyed, up to 98%, said it would become harder for small businesses to stay afloat under higher wage mandates.

Perhaps most notably, many economists questioned whether raising the minimum wage would achieve its intended goal.

“We’re seeing economists are generally concerned about whether this policy actually delivers meaningful wage benefits,” Paxton said, pointing instead to alternatives like earned income tax credits and other support programs that supplement wages without placing the full burden on employers.

Supporters argue higher wages are necessary to keep up with inflation and rising living costs. But the survey raises fresh doubts about whether the policy could end up doing more harm than good.

Read the full study here: