Today, the Employment Policies Institute released “The State Employment Impact of a $15 Minimum Wage”, a new study in which economists Dr. Bill Even and Dr. David Macpherson analyze the employment impact of raising the federal minimum wage to $15. The Biden-Harris campaign, as well as the Democratic party platform, have endorsed this policy approach and other key provisions found in the Raise the Wage Act, including the elimination of the federal tipped wage.
Building on a 2019 Congressional Budget Office report, Even (Miami University) and Macpherson (Trinity University) provide a state-by-state and demographic breakdown of the impact of a $15 federal minimum wage. They estimate that if the Raise the Wage Act were enacted next year, raising the federal minimum to $15 and the federal tipped wage to $12.60 by 2027, this would cost the nation over 2 million jobs.
Based on their projections, Even and Macpherson find that the Raise the Wage Act would have the following effects if passed in 2021:
- Out of the 2 million minimum wage jobs lost by 2027, Texas will lose 370,000 jobs, and Pennsylvania, North Carolina, Ohio, and Georgia will lose over 100,000 jobs each.
- Over the last two decades, the federal minimum wage grew by 41%. A $15 minimum wage by 2027 would represent a 107% increase in just six years.
- All age categories are estimated to experience minimum wage job losses, but teenagers account for 42% of all losses.
- A majority (61%) of minimum wage jobs lost will be those held by women.
- Nearly one-third of tipped workers affected by minimum wage increases will experience job loss, while 8% of non-tipped workers will lose their jobs.
- Half of the job losses due to this minimum wage increase will be in hospitality industries (Arts, Entertainment, and Recreation; and Accommodation and Food Services), mostly in restaurants and bars.
To read the full study, download the report here.