Minimum Wage

New Study Shows Minimum Wage Hike Is a Job Killer for Arizona

Adding insult to injury, nearly 70% of benefits would go to families that aren’t poor

September 26, 2006

Washington, DC–A new study commissioned by the Employment Policies Institute (EPI) on the impact of Arizona’s proposed minimum wage increase shows that not only would a hike put over 4,600 Arizonans out of work, but nearly 70% of the benefits would go to families that aren’t poor.

The research, conducted by labor economist Dr. David Macpherson of Florida State University, also reveals:
* The hike would deliver an $87.4 million hit to Arizona businesses;
* The resultant job loss equates to $54.8 million in lost income for affected employees;
* More than one-third of the jobs lost will be borne by families earning less than $25,000.

This study reaffirms decades of economic research showing that minimum wage increases are a blunt and ineffective means of assisting low-income families because of one simple fact: most minimum wage earners aren’t poor. Specifically, Dr. Macpherson’s study shows that:
* 83% of employees that will benefit from the hike either live with their parents, are part of a dual earning household, or don’t have a family to support;
* The average family income of those who will benefit is over $41,000 a year.

“The cruel irony of minimum wage hikes is that they actually hurt the very people they are intended to help by jeopardizing the jobs of low-skilled adults,” said Mike Flynn, EPI’s director of legislative affairs. “Making matters worse, the ballot initiative includes a provision to index the minimum wage to inflation, essentially putting the economy on auto-pilot.”

Click here to read “The Effects of the Proposed Arizona Minimum Wage Increase” by Dr. David Macpherson.