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
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Publication Date: September 2006
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Topics: Minimum Wage
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.”