Lower wages = more jobs

Posted on May 15, 2009

State legislators and the public should beware that putting minimum wage increases on auto-pilot–without any mechanism for stopping the increases during a recession–is an extremely misguided policy that is yielding disastrous results for vulnerable employees in the state (“Western’s overall student employment rate down,” May 1).

Decades of economic research predicted that there would be an increase in job losses following minimum wage hikes, particularly among vulnerable groups like minority teens and adults without a high school diploma.

This job loss is only exacerbated in a weak economy.
In Washington (which has the highest minimum wage in the nation), employers who are seeing demand for their products and services drop dramatically are forced to cut employees hours and eliminate some jobs entirely in order to stomach automatic wage hikes that take place.

The unintended consequence of reckless, auto-pilot minimum wage hikes is job loss for the least skilled workers (often students) at a time when they need help the most. A job at the previous minimum wage is much better than none at a higher rate.

Kristen Lopez Eastlick
Senior Economic Analyst
Employment Policies Institute