Minimum Wage: Research

Playing politics with a million jobs

$10.10 Minimum Wage Threat

President Obama and Senate Democrats are promoting a bill that would raise the federal minimum wage by nearly 40 percent from $7.25 an hour to $10.10 an hour. The New York Times and Associated Press have reported that this push for higher mandated wages is part of a 2014 election-year strategy.

Supporters argue that such a boost 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. Recent research claiming to overturn this consensus has been thoroughly refuted in a study forthcoming in Cornell University’s labor relations journal.

This new analysis from economists at Miami and Trinity University uses updated Census Bureau data from 2012 and 2013 to provide state-level estimates on the number of jobs that would be lost as a result of a $10.10 wage hike. Across all 50 states, the updated analysis shows that up to one million jobs would be lost—consistent with research from the Congressional Budget Office.

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Women and the minimum wage

In a recent report, the White House described an increase in the minimum wage as “especially important for women,” pointing out that just over half of the employees covered by the President’s $10.10 proposal are women.

According to the Census Bureau, women would actually be disproportionately harmed by the President’s minimum wage proposal: Of the 500,000 jobs that the CBO projects would be lost when the minimum wage increases, 285,000 of them—or about 57 percent—are jobs held by women.

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