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The current federal Minimum Wage is $7.25.

Indexing the Minimum Wage: A Vise on Entry-Level Wages

Minimum Wage Misconceptions

Think raising the minimum wage is a good idea? Think Again.

State Minimum Wage Information

Annual Minimum Wage figures
Learn more: Statistics | Calculator | Research | Links | Teen Unemployment




5 Things You Didn’t Know About the Minimum Wage

  1. For every 10 percent increase in the minimum wage, teen employment at small businesses is estimated to decrease by 4.6 to 9.0 percent.1

    According to the U.S. Bureau of Labor Statistics, teen unemployment averaged a record high 24.3 percent in 2009.

  2. For every 10 percent increase in the minimum wage, estimates show employment may fall as much as 6.6 percent for young black and Hispanic teens ages 16 to 19.2

    African American teen unemployment averaged 39.5 percent in 2009, which is more than four times the national unemployment average and 26 percent higher than last year.

  3. According to recent U.S. Census data, only 16.5 percent of minimum wage recipients are raising a family on the minimum wage. The remaining 83.5 percent are teenagers living with working parents, adults living alone, or dual-earner married couples.3

    Raising the minimum wage is an ineffective tool to fight poverty. Programs like the Earned Income Tax Credit are far better at helping low-income Americans.4

  4. The average annual family income of those earning the minimum wage in 2009 is over $48,000.2

    One study found that only 10.5 percent of the beneficiaries of then-candidate Obama’s proposal to raise the minimum wage to $9.50 would come from poor families.4

  5. Economists at the University of California-Irvine and the Federal Reserve reviewed the economic evidence and found a majority in support of “the view that minimum wages reduce the employment of low-wage workers.”5

    27 million Americans lack even the basic skills needed to fill out a job application.6 Minimum wage increases make it more difficult to hire and train less-skilled individuals like this.

Between July 2007 and July 2009, the federal minimum wage increased by 40 percent. A new study from Ball State University found there were 550,000 fewer part-time jobs as a result of this increase.

Federal policy makers allowed the wage hike to go through despite decades of research showing that minimum wage hikes take a sledgehammer to the entry-level job market. As employers are faced with higher labor costs, they hire workers who have more work experience or higher skill levels. This leaves unskilled applicants without a job, and without the invisible curriculum that comes with a first job experience.

References:

1 Sabia, Joseph J. (2006) The Effect of Minimum Wage Increases on Retail and Small Business Employment. Washington, DC: The Employment Policies Institute.

2 Neumark, David. (2007) Minimum Wage Effects in the Post-Welfare Reform Era. Washington, DC: The Employment Policies Institute.

3 Bureau of Labor Statistics. (2009) “The Employment Situation: June 2009” and EPI’s internal analysis of the Outgoing Rotation group Data Files from the Current Population Survey, June 2008-May 2009.

4 Sabia, Joseph J. and Burkhauser, Richard. (2008) Minimum Wages and Poverty: Will the Obama Proposal Help the Working Poor? Washington, DC: The Employment Policies Institute.

5 Neumark, David and Wascher, William. (2008) Minimum Wages.The MIT Press; Cambridge, MA. PP. 104-105.

6 National Assessment of Adult Literacy. (2003). National Center for Education Statistics; US Department of Education.


Press Releases / Op-Eds

3/6/12 New Analysis: Average Family Income of Connecticut Wage Hike Beneficiary Above $80,000 Per Year

Click here to read press release

11/29/11 San Francisco First in the Country with Minimum Wage above $10/Hour
Today, the Employment Policies Institute (EPI) announced that San Francisco, California will become the first in the country to raise the minimum wage above $10 an hour. The new wage rate in the city as of January 1, 2012 will be $10.24 an hour, a 32 cent increase from 2011. Eight states will also increase their minimum wage in 2012 due to indexing.
Click here to read press release

To view all press releases/op-eds click here.


Studies

4/12, Can Raising the Minimum Wage Reduce Poverty and Hardship?
Click here for study

11/11, Tip Credits and Employment in the U.S. Restaurant Industry
Click here for study

5/11, Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases
Click here for study

For a full list of all Minimum Wage studies click here.

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