December 5, 2016
Earlier this year, the Albany Times-Union explored the cozy relationship between labor unions and a research outfit at the University of California-Berkeley. The Berkeley team–which is partially funded by and works closely with organized labor–is often called upon when a favorable report … Continue reading
November 29, 2016
As another round of coordinated minimum wage protests occur, the consequences of dramatic starter wage increases — including lost jobs, reduced hours, and business closures — are playing out in real time. EPI has been documenting these consequences through its project Faces … Continue reading
November 10, 2016
While the success of minimum wage ballot measures this election cycle might suggest a renaissance in state grassroots passion, a closer look at the financing of the associated ballot committees reveals an out-of-state funding apparatus. Arizona, Maine, and Colorado saw an … 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. 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 $14.82 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.