Recent Updates

  • A Fast Food Protest Built on Flimsy Facts

    SEIU-supported protesters were bused to McDonald’s annual shareholders’ meeting in Oak Brook, Illinois today to agitate in favor of higher pay and greater benefits. Their demands were twofold and familiar: an increase in the minimum wage to $15 an hour … Continue reading

  • A Golden State Payout for Big Labor

    California’s impending $15 minimum wage will take full effect by 2022-23. Evidence suggests that organized labor’s $1.6 million investment in the venture is already set to pay off. Typically, unions support a higher minimum wage to achieve an indirect pay benefit … Continue reading

  • America’s Poor Need a Job, Not a “Raise”

    Will raising the minimum wage to $15 an hour dramatically reduce poverty rates? Setting aside the policy’s negative impact on jobs, a dramatic minimum wage hike faces a far more fundamental problem: A majority of Americans in poverty don’t work and can’t … 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. California and Massachusetts currently have the highest state minimum wages in the country at $10 per hour, and Emeryville, CA, currently has the highest city minimum wage at $14.44 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.