Proposed Minimum Wage Hike Would Harm Albuquerque’s Least-Skilled Employees

  • Publication Date: May 2005

  • Topics: Minimum Wage

ALBUQUERQUE, N.M. – When Albuquerque’s city council meets to discuss increasing the minimum wage to $7.15 they should strongly consider the negative impact such action would have on the city’s most at need. A national survey of the American Economic Association found that 77 percent of economists believe raising the minimum wage destroys employment opportunities. This is particularly true for the least skilled. Decades of academic research have revealed the following points about the minimum wage:

* Increasing the minimum wage hurts low-skill employees: Most economists agree that increasing the minimum wage destroys jobs. This job loss is concentrated on the least skilled employees in the economy. Research from Duke University, the University of Wisconsin, and Michigan State University, find that increases in the minimum wage hurt low-skill employees. Cornell University economists found that groups such as high school dropouts and black young adults suffer four times more employment loss from a minimum wage increase than their non-black and more educated counterparts.

* Most minimum wage employees are not supporting a family: Previous research to measure the effects of a similar minimum wage increase on the national level utilizing U.S. Census data revealed that only 15 percent of beneficiaries from a proposed minimum wage increase would have been single parents with children.

* Raising the minimum wage does not help families in poverty: The minimum wage is a blunt instrument that is unable to differentiate between a low-wage employee (who may be from a wealthy family) and a low-income family head. As a result, only a fraction of benefits from a minimum wage increase go to families in poverty.

* Minimum wage employees receive regular raises: Economists at Florida State University and Miami University of Ohio find that, on a national level, 65 percent of minimum wage employees receive a raise within 1-12 months of employment and these raises are 6 times higher than those for all other employees in the economy.

“You cannot deny the laws of economics,” said EPI’s director of research Craig Garthwaite said. “When you raise the minimum wage, jobs will still be lost and the hardest hit will be the least skilled employees—the very individuals a minimum wage increase is intended to help.”