Minimum wage hikes have recently been touted as a fix for affordability concerns. But as lawmakers set their sights on a new Congress and the presidential election in 2028, EPI Executive Director Michael Saltsman writes in the Wall Street Journal: “A substantial increase in the minimum wage would do the opposite.”
In his latest op-ed, Saltsman lays out that instead of increasing affordability, minimum wage hikes have been demonstrated to raise prices of basics like food and rent.
“Dozens of states and cities have raised their minimum wages. These local mandates range from $8.75 in West Virginia to nearly three times the federal standard in Seattle. Rather than make life more affordable, these interventions make it less so.
A study published in the Journal of Economic Surveys found that a 10% increase in the minimum wage causes food-price increases up to 4%. These price hikes can be felt directly (through the increased cost of a meal out) or indirectly, when accumulated costs across sectors lead to unexpected consequences.
A report in the Journal of Urban Economics found that a 10% increase in minimum wage was associated with up to a 7.3% increase in rent, erasing some of the short-term benefit from a wage boost. In a 2026 survey of U.S. labor economists, 80% said a $20 federal mandate would broadly raise the cost of living.
It’s a vicious circle: Lawmakers raise the minimum wage, responding to concerns about rising costs; then the higher minimum wage causes costs to rise further, triggering more calls to “raise the wage.”
Even worse, they could leave many workers out of a job entirely. EPI estimates that based on nonpartisan Congressional Budget Office methods, a $20 federal minimum wage – as proposed by Sen. Bernie Sanders – could cost as much as $2.3 million jobs.
Read the full op-ed here.