New Analysis Showcases Consequences of $11 Minimum Wage in St. Louis
Economists find roughly 1,000 jobs lost, half of which come among city youth
Publication Date: March 2017
Topics: Minimum Wage
Washington D.C. – Today the Employment Policies Institute (EPI) released a new analysis conducted by economists David Macpherson from Trinity University and William Even from Miami University examining the consequences of raising St. Louis minimum wage to $11 an hour–a 43 percent increase that may take place on January 1st, 2018. The state legislature is attempting to block this increase after months of courtroom battles, so that one uniform state minimum wage applies. The analysis concludes that roughly 1,000 jobs would be lost in the city at $11, and that half of these job losses would come among young employees aged 16 to 19.
The economists reached their conclusion using Census Bureau data and following the methodology of the nonpartisan Congressional Budget Office (CBO), whose 2014 analysis of the proposed $10.10 federal minimum wage found that 500,000 jobs would be lost nationally. The CBO analysis was based on a review of 60 different empirical studies on the impact of raising the minimum wage.
Drs. Macpherson’s and Even’s analysis also finds:
- Women represent about 60 percent of those expected to lose jobs.
- Employees aged 16 to 24 would make up two-thirds of the lost jobs.
- Those with a high-school education or less would make up about 70 percent of the lost jobs.
- Two-thirds of the lost jobs would come in just two industries: Retail and Leisure & Food Service.
Data from the American Community Survey suggest these job losses would hit St. Louis particularly hard. The city has an estimated 31 percent unemployment rate for young adults aged 16 to 19; in some neighborhoods, the unemployment rate approaches 60 percent.
“A 43 percent increase in St. Louis’ starter wage would turn the city’s gateway of opportunity into a wall,” said Michael Saltsman, managing director at EPI, “To keep career pathways open for young residents facing crisis-level unemployment rates, the city should back off efforts to ‘raise the wage’–and the state legislature should ensure that one statewide minimum wage prevails.”
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding employment growth. In particular, EPI focuses on issues that affect entry-level employment. EPI receives support from restaurants, foundations, and individuals.