December 10, 2014
Politicians like to say that “America needs a raise.” That might be true, but new research suggests that raising the minimum wage is not the best way to give them one. Researchers at the University of California-San Diego studied the … Continue reading
November 5, 2014
Last month, Pastor Jack Mosley was forced to close his Hillsdale, Michigan restaurant, Tastes of Life because Michigan’s recent minimum wage increase made it impossible for him to stay in business. Proponents of raising the minimum wage say that cases … Continue reading
October 30, 2014
With the exception of hardline minimum wage advocates and their message mavens at PR firm BerlinRosen, most rational onlookers admit that a minimum wage hikes cost jobs. The nonpartisan Congressional Budget Office, the nation’s Chief Financial Officers, the country’s largest … 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. 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.