September 24, 2015
The Los Angeles County Federation of Labor was widely-ridiculed for its attempt to exempt union members covered by collective bargaining agreements from the $15 minimum wage it had championed for the city. As the Los Angeles Times wrote in a scathing editorial: It’s stunning … Continue reading
September 4, 2015
Advocates for a dramatically-higher minimum wage–in cities including Seattle, San Francisco, and Oakland–have come face to face with an embarrassing downside for their movement: Unflattering press coverage. Past increases in the minimum wage were often in the range of a … Continue reading
August 21, 2015
When New York Governor Andrew Cuomo announced in May his intention to impanel a wage board to “examine the minimum wage in the fast food industry,” fair-minded observers understood the implications: The minimum wage was going up, and it was … 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.