The House of Representatives will likely vote this week on a plan to raise the federal minimum wage to $15 per hour by 2024. Much of the debate has concerned its employment effect: the Congressional Budget Office estimates the Raise the Wage Act would cost 1.3 million to 3.7 million jobs. But this is only one negative effect. Additional tradeoffs would affect workers who remain employed, and many of these are not in the CBO’s calculations.
Workers are paid more than just wages; they often receive non-wage compensation such as employee discounts, free meals or parking, flexible hours, insurance, tuition assistance and more. One way employers can find a way to afford government-mandated higher wages is to cut this non-wage pay. Some workers might see a higher