New Study Shows Consequences of California’s $15 Minimum Wage
Their findings are stark: The economists’ preferred model show that past minimum wage increases in California have caused a measurable decrease in employment among affected employees. Specifically, they find that each 10% increase in the minimum wage has led to a nearly five-percent reduction in employment in industries with a higher percentage of lower-paid employees.
The authors apply these estimates to approximate that
California will lose 400,000 jobs as a consequence of higher minimum wages by 2022. Nearly half of the observed job loss occurs in foodservice and retail industries
.
About the Minimum Wage
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.