Minimum Wage Increases Costs Millions of US Jobs
State minimum wage increases phasing in around the US will result in about 2.6-M job losses with “minimal” increases in workers’ salaries, a report from the American Action Forum reports.
According to the center-right group, 22 states and the District of Columbia will implement minimum wage increases this year, but it will come at a cost of 383,000 job losses.
“The full minimum wage increases over the next several years will cost 1.8-M jobs,” policy analysts contend. “When combined with recent previous minimum wage increases in some of the same states, the total loss comes out to 2.6-M jobs.”
“In the end, the additional earnings transferred from the job losers to the job keepers are minimal,” and under minimum wage increases, “for each job loss, total wage earnings only rise by $6,900,” the report states.
The proposals to raise the minimum wage are “well-intended,” the authors write, but… “it is important to consider the negative labor market consequences.”
Employers usually pay for wage increases by cutting their workforce, raising the price on products, slowing down their hiring, or replacing more productive workers with low-skilled workers, according to the report.
“Unfortunately, it is the lowest-wage, least-skilled workers who pay the largest prices for these consequences,” the Forum report contends.
Have a terrific week.
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