New Analysis: Democrats’ $15 Minimum Wage Plan is a $100-Billion New Mandate for Hard-Hit Employers
Sharp Rise in Wage Costs Will Force Biz to Cut Millions of Jobs
Publication Date: January 2021
Washington, D.C. (January 26, 2021) – In advance of today’s introduction of $15 minimum wage legislation, the Employment Policies Institute (EPI) released an updated analysis highlighting the millions of jobs lost as a consequence of this $100-billion new mandate.
In this study, Drs. William Even (Miami University) and David Macpherson (Trinity University) provide a state-by-state breakdown of the negative employment effects and total costs of the proposal. Their analysis is based on a methodology developed by the nonpartisan Congressional Budget Office, and updated to include changes in the workforce since 2019, including the coronavirus outbreak.
The updated analysis can be found here.
This updated release includes an appendix of data showing the financial impact of a $15 federal minimum wage: the proposal is expected to cost employers over $99 billion nationwide, including $27 billion for restaurant industry employers alone.
Consequently, the authors find that a $15 wage will create significant job loss in most states, including Pennsylvania (143,402 jobs lost), Ohio (108,312 lost), Wisconsin (83,683 lost), South Carolina (55,304 lost), Utah (35,039 lost), New Hampshire (13,179 lost), West Virginia (12,331 lost), and Delaware (10,044 lost).
This finding builds on well-established evidence in the economic literature that raising the minimum wage leads to significant employment loss. This consensus was confirmed this week in a new study published by the National Bureau of Economic Research.
“A $15 minimum wage will cost more than 2 million Americans their jobs as the nation struggles to recover from historic unemployment and economic hardship,” said Michael Saltsman, Managing Director of the Employment Policies Institute. “This policy will not only create more obstacles to recovery from the pandemic, but will inflict more economic pain on businesses and employees who need relief most — like restaurants and other hospitality workers.”