The Minimum Wage

Research shows that raising the minimum wage hurts the least-skilled and least-experienced jobseekers the most.

Playing politics with thousands of jobs

Minimum Wage Threat

Proponents say that boosting the minimum wage will reduce poverty without reducing jobs. But the academic evidence paints a very different picture: According to economists at the Federal Reserve Board and the University of California-Irvine, the majority of empirical research shows that a higher minimum wage reduces employment for the least-skilled while having little to no effect on poverty rates.

This is supported by research from economists from American and Cornell University who studied the 28 states that raised their minimum wages between 2003 and 2007 and found no associated reduction in poverty. The risks associated with the most popular minimum wage proposals -$10.10, $12, and $15 – are outlined below.

$10.10 Minimum Wage

In 2013, President Obama and Senate Democrats began promoting an increase in the federal minimum wage by nearly 40 percent from $7.25 an hour to $10.10 an hour. At the time, The New York Times and Associated Press reported that this push for higher mandated wages was part of a 2014 election-year strategy.

In a 2014 study, the nonpartisan Congressional Budget Office (CBO) tossed cold water on the unsupported idea that new mandates on low-margin employers won’t carry consequences. The CBO, which is cited as an expert by both Republicans and Democrats, estimated that a half-million jobs would be lost nationwide should a $10.10 minimum wage take effect. The CBO based its estimates on the results of dozens of peer-reviewed academic studies on the jobs impact of a higher minimum wage, including the latest and most up-to-date research.

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$12 Minimum Wage

In March 2015, Sen. Patty Murray (D-CA) and Rep. Bobby Scott (D-VA) introduced the “Raise the Wage Act”, which would raise the federal minimum wage by 66 percent from $7.25 to $12 an hour. The legislation received a high-profile backer this fall in Democratic presidential candidate Hillary Clinton.

Using the nonpartisan Congressional Budget Office (CBO) methodology outlined above, Drs. William E. Even and David Macpherson, economists from Miami University and Trinity University, respectively, conclude that 770,000 jobs would be lost if this legislation mandating a $12 minimum wage were enacted.

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$15 Minimum Wage

The $15 minimum wage proposal has recently gained traction – largely due to the Fight for $15 movement. But even a top organizer for the SEIU has admitted, that this unprecedented number was pulled out of thin air. In his words, “$10 was too low and $20 was too high, so we landed at $15.”

A new survey conducted by the University of New Hampshire Survey Center asks economists about their reaction to a $15 minimum wage. It finds that 72 percent of U.S.-based economists oppose a $15 federal minimum wage.

The survey asks several additional questions that shed light on this topline finding. Five out of six respondents (83 percent) said that a $15 federal minimum wage would have harmful effects on youth employment levels. Three-quarters (76 percent) of respondents said that a $15 minimum wage would have a negative effect on the number of jobs available. And two-thirds (67 percent) of respondents said that a $15 minimum wage would make it more difficult for small businesses to stay in business.

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Minimum Wage Research

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