Nevada Announces Minimum Wage Increase Despite Record High Unemployment Rate

Employment Policies Institute Points to the Unintended Consequences of a Minimum Wage Hike
  • Publication Date: April 2010

  • Topics: Minimum Wage

WASHINGTON, DC – Today, Nevada State Labor Commissioner Michael Tanchek officially announced a 70 cent increase in the state’s minimum wage. The increase to $8.25 an hour will take effect July 1, 2010.

Responding to the news, Michael Saltsman, research fellow at the Employment Policies Institute, released the following statement:

Nevada’s decision to increase their minimum wage is more than a dangerous gamble – it’s a proven loser.
In January 2007, Nevada raised its minimum wage and later that year it was indexed to create annual increases in each year after.

Since then, Nevada’s unemployment rate has either increased or stayed the same every month. In February of 2010 it reached a record high 13.2 percent, the second highest in the country. The state hasn’t seen a decrease in its unemployment rate in four years.

Nearly 75 percent of economists surveyed agree that mandated wage hikes are job-killers, especially for less-skilled individuals trying to get started in the workforce.

Higher minimum wages make it more expensive for employers in labor intensive industries like gaming to hire and train entry-level employees. With an economy that relies heavily on tourism, the last thing struggling retail and restaurant owners need is a new wage mandate that will cut both employment and their bottom line.

Unless Nevadans want to share more than Lake Tahoe with their troubled neighbors in California, they should stop ignoring the consequences of increasing their state’s minimum wage.