March 1, 2019
California’s minimum wage will increase over the next three years until it reaches $15 an hour, but many businesses have already started to feel the pinch. Andy Smith, the former owner of the Bread Store in Sacramento, attributed the decision … Continue reading
February 5, 2019
Contrary to Democrats’ claim that a $15 minimum wage is “good for businesses,” new research shows that a $15 minimum wage would cost as many as two million jobs. Business owners throughout the country have grappled with the costs and consequences of … Continue reading
January 15, 2019
In his 2013 State of the Union, President Obama called for a 25 percent increase in the federal minimum wage, to $9 an hour. Five years later, and the Democratic Party is demanding a minimum wage increase of more than … Continue reading
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. Washington currently has the highest state minimum wages in the country at $11.50 per hour, and Emeryville, CA, currently has the highest city minimum wage at $15.69 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. A new study from economists at the University of California, Irvine and the National Bureau of Economic Research find that over the past 30 years, increases in the minimum wage have not reduced poverty rates in disadvantaged neighborhoods. 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.