May 21, 2018
New Jersey Democratic Gov. Phil Murphy has his sights set on gradually raising the state’s minimum wage from $8.60 to $15 an hour. But many small business owners fear that customers will question whether it’s worth paying more for virtually the same … Continue reading
May 15, 2018
This fall, Michigan voters may consider a ballot proposal to further increase the state’s minimum wage to $12 an hour—a 30 percent increase over the state’s current minimum wage. However, included in this proposal is a far more radical policy … Continue reading
April 12, 2018
A full-page ad in today’s New York Post exposes the true motives behind the Restaurant Opportunities Center (ROC) and its push to eliminate the tip credit. (For those not acquainted with the tip credit debate, a primer is available here.) ROC’s founder, … 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 and Massachusetts currently have the highest state minimum wages in the country at $11 per hour, and Emeryville, CA, currently has the highest city minimum wage at $15.20 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.