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.
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.