The fierce political debate over raising the minimum wage, which is repeated yearly in legislatures across the country, has at times been matched by a strong academic debate on the subject. Specifically, economists have argued over whether a higher minimum wage reduces the employment of less-skilled jobseekers. The published research on the subject points overwhelmingly in one direction: A summary of the last two decades…
San Francisco is known as the City by the Bay, but for progressive advocates of wage and benefit mandates, it’s a city on a hill. San Francisco has the highest compensation floor in the country, with (in 2012) a $10.24 minimum wage, a mandatory health care expenditure of as much as $2.20 an hour, and one hour of mandatory paid sick time for every 30…
Congress is considering a series of proposals to raise the $7.25 federal minimum wage. The “Fair Minimum Wage Act of 2012,” to be introduced by Rep. George Miller (D-CA), which would raise the federal minimum wage by 35 percent to $9.80 and index it for inflation; The “Rebuild America Act,” introduced by Sen. Tom Harkin (D-IA) and Rep. Rosa DeLauro (D-CT), which would raise the…
In 2011, the Census Bureau reported that the country’s poverty rate was 15.1 percent—the highest rate in nearly 20 years. One policy prescription for this problem is an increase in the federal minimum wage. It’s an intuitive thought: Raise the wages of the lowest paid workers, and poverty rates are sure to fall. Unfortunately, the empirical evidence hasn’t borne this out. Instead, multiple studies have…
Few parts of the Fair Labor Standards Act (FLSA) are more poorly understood than provisions relating to tipped employees. Though the federal minimum wage is set at $7.25 an hour, the FLSA permits tipped employees to be paid a cash wage of $2.13 an hour—so long as the employee earns at least the federal minimum of $7.25 when their tips are included. The difference between…
Proponents of the Patient Protection and Affordable Care Act and the companion Health Care and Education Reconciliation Act of 2010, known collectively as the Affordable Care Act (ACA) , expect that the law will substantially expand health insurance coverage to the 17.6 percent of currently uninsured, non-elderly working Americans, without dramatically changing the terms under which the currently insured now receive their health insurance. Conversely,…
Economic analysis spanning decades of data shows raising tipped minimum wage requirements (slashing tip credits) brings consequences for servers’ and bartenders’ jobs and income, and restaurants’ ability to keep their doors open. Recently, anti-tip credit activists have targeted various states across the country, including several neighboring states in New England. There are currently active tip…
It’s no secret tip credit elimination has already wreaked havoc on the nation’s capital: employment is down in full-service restaurants, tips are disappearing, and restaurants are looking for ways to move out or change their operations. Yet the same activists are looking to bring the same bad policy around the country, now setting sights on…