Recent Updates

  • Big Labor Tries (and Fails) to Dismiss the Consequences of $15

    Advocates for a dramatically-higher minimum wage–in cities including Seattle, San Francisco, and Oakland–have come face to face with an embarrassing downside for their movement: Unflattering press coverage. Past increases in the minimum wage were often in the range of a … Continue reading

  • New York’s Fast Food Flop

    When New York Governor Andrew Cuomo announced in May his intention to impanel a wage board to “examine the minimum wage in the fast food industry,” fair-minded observers understood the implications: The minimum wage was going up, and it was … Continue reading

  • New Analysis: Maine’s Minimum Wage Misfire

    Portland’s City Council recently voted to raise the city’s minimum wage to $10.10 an hour. Now, proponents at the Maine AFL-CIO have launched a referendum to raise the minimum wage statewide by 60 percent to $12 an hour. In support … Continue reading

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About the Minimum Wage

The minimum wage is the minimum hourly wage an employer can pay an employee for work. Currently, the federal minimum wage is $7.25 an hour (part of the Fair Labor Standards Act) and some states and cities have raised their minimum wage even higher than that. San Francisco, CA, has the highest minimum wage in the country at $10.55 an hour.

Employees that earn the minimum wage tend to be young, and work in businesses that keep a few cents of each sales dollar after expenses. When the minimum wage goes up, these employers are forced to either pass costs on to consumers in the form of higher prices, or cut costs elsewhere–leading to less full-service and more customer self-service. As a result, fewer hours and jobs are available for less-skilled and less-experienced employees.

Minimum wage increases do not help reduce poverty. Award winning research looked at states that raised their minimum wage between 2003 and 2007 and found no evidence to suggest these higher minimum wages reduced poverty rates. While the few employees who earn a wage increase might benefit from a wage hike, those that lose their job are noticeably worse off.

Employees who start at the minimum wage aren’t stuck there. Research found that the majority of employees who start at the minimum wage, move to a higher wage in their first year on the job.