Job loss predictions over rising minimum wages haven’t come true
By Stef W. Kight, Dion Rabouin Nov 25, 2019
Eighteen states rang in 2019 with minimum wage increases — some that will ultimately rise as high as $15 an hour — and so far, opponents’ dire predictions of job losses have not come true.
What it means: The data paint a clear picture: Higher minimum wage requirements haven’t reduced hiring in low-wage industries or overall.
State of play: Opponents have long argued that raising the minimum wage will cause workers to lose their jobs and prompt fast food chains (and other stores) to raise prices.
But job losses and price hikes haven’t been pronounced in the aftermath of a recent wave of city and state wage-boost laws.
And more economists are arguing that the link between minimum wage hikes and job losses was more hype than science.
What we’re hearing: “The minimum wage increase is not showing the detrimental effects people once would’ve predicted,” Diane Swonk, chief economist at international accounting firm Grant Thornton, tells Axios.
“A lot of what we’re seeing in politics is old economic ideology, not what economics is telling us today.”
The doom-and-gloom that opponents have predicted, “are part of the political policy debate,” Jeffrey Clemens, an economics professor at UC San Diego, tells Axios.
His research for the conservative American Enterprise Institute is often quoted in arguments against minimum wage increases.
But Clemens told Axios: “People will tend to make the most extreme argument that suits their policy preferences, and it’s not surprising if that ends up being out of whack with the way things unfold on the ground.”
Where it stands: Cities and states around the country are taking action as the federal minimum wage — $7.25 an hour — “has remained unchanged for the longest stretch of time since its 1938 inception under the Fair Labor Standards Act,” according to a recent paper by the New York Fed.
Cities like New York, Seattle, Chicago and San Francisco have raised local minimum wages, and individual companies have done so as well: Amazon set its minimum at $15 an hour last year.