Minimum Wages to Rise in at least Ten States and Three Cities in 2013

Research Shows Wage Hikes Result in Unintended Consequences for the Least-Skilled
  • Publication Date: November 2012

  • Topics: Minimum Wage

WASHINGTON, DC – Today, the Employment Policies Institute (EPI) announced that ten states and three cities will increase their minimum wages on January 1, 2013. Washington continues to lead the country with the highest state minimum wage, $9.19 per hour.
San Francisco will have the highest overall minimum wage at $10.55 per hour. Last week, San Jose, CA and Albuquerque, NM passed ballot initiatives to increase their city minimum wages and annually increase the wage based on inflation.

A full graphical list of the states and their 2013 wage changes is included below. (Nevada and Santa Fe, NM, may also raise their minimum wages in 2013, although these changes are announced after the first of the year.)

“There is little doubt that raising the minimum wage has disastrous results for the most vulnerable jobseekers,” said Michael Saltsman, research fellow at the EPI. “According to economists at the University of California-Irvine and the Federal Reserve Board, 85 percent of the most credible studies on the subject from the last two decades point to job loss following an increase in the minimum wage.”

The minimum wage also has a poor track record of reducing poverty. Studying the 28 states that raised their minimum wage between 2003 and 2007, economists from Cornell University and American University found no associated impact on state poverty rates. One reason is poor targeting: Census Bureau data show that the average family income of a beneficiary of a currently-proposed minimum wage increase is above $50,000 a year.

“The research on minimum wage hikes is clear: They reduce job opportunities and do little to reduce poverty,” Saltsman concluded. ”“At a time when unemployment for low-skilled job seekers remains near record highs, federal, state, and local policymakers should be focused on boosting our economy, not creating additional barriers to employment.”