Epi researchers have examined how the minimum wage affects workers and the economy, who benefits from the minimum wage, and how the declining value of the federal minimum wage over time has contributed to the growth in u. Minimum wage and its effects on small business economic. According to economists at the federal reserve board and the university of californiairvine, the majority of empirical research shows that a higher minimum wage reduces employment for. Keeping track of state, county and city minimum wage rates weve seen a significant increase in the number of labor laws passed in states, counties and cities across the country. Fpi and nelp raising new yorks minimum wage page 3 ii. In the absence of action at the national level, many states and localities have raised their own minimum wages. Employers generally have to pay workers the highest minimum wage prescribed by federal, state, and local law.
Wellings argued that living costs are the root of the problem, living costs feed into benefits increases which creates the problem of people not entering jobs. Lowwage workers saw the biggest wage growth in states that. Income volatility affects your middleage brain citylab. Our measure is based on methodology developed by colleagues at the san francisco fed the wage growth tracker is updated. But the academic evidence paints a very different picture. Every month, the bureau of labor statistics releases a report on the employment situation for the previous month. On july 1st, minimum wages rose in two states, the district of columbia. Economic policy institute, nominal wage tracker web page, last updated. Economic policy institute, wages by percentile, state of working america data library.
The minimum wage in the united states is set by us labor law and a range of state and local laws. Epi researchers have examined how the minimum wage affects workers and the economy, who benefits from the minimum wage, and. The minimum wage is a critical labor standard meant to ensure a fair wage for this countrys lowest paid workers. Jan 18, 2017 risep houses a large amount of data on work, wages and income as the most important indicators of how working families are doing. Says some vague level of minimum wage is good policy. Jul 25, 2018 in mid2018, a meme widely shared on social media decried the passage of legislation by missouri republicans that allegedly lowered the minimum wage in st. Taxing and reporting the personal use of employerprovided. The economic policy institute minimum wage tracker.
The impact of the national minimum wage on productivity, business performance and employment. Illinoiss minimum wage law sets a lower minimum wage for workers under age 18 for their first 650 hours of work with any employer. Growth in the median wage represents the experience of a worker whose wage is in the middle of the wage distribution in the current month, relative to a worker in the middle of the wage distribution 12 months earlier. If the states that increased their minimum wage had experienced slower job growth than those that hadnt, that would not be an indictment of the minimum wage, any more than the above statistic supports it. In fact, the economic consensus regarding such hikes is so overwhelming that a full 85% of the credible studies from the past 20 years reached the same conclusion.
This would occur as they substitute other inputs for the higher priced lowwage workers, and as they reduce their output because of the higher labour cost. In the late 1960s, in contrast, the minimum wage was around half of that typical wage. National minimum wage economics bibliographies cite this. The impact of covid19 on hourly and lowwage workers. The aim of the national minimum wage is to help increase incomes of the low paid. Explore the map to see how these rapidly changing laws differ across the country, and read epis recent research explaining the benefits of raising the minimum wage and eliminating. National minimum wage economics bibliographies cite. His areas of expertise include the minimum wage, inequality, and low wage labor markets.
Data are from authors analysis of current population survey basic monthly microdata from the u. Saltsman is the research director at the employment policies institute. Minimum wage rises in several jurisdictions 247 wall st. Jul 05, 2017 by staff of the economic policy institute the federal minimum wage has not been raised since 2009. Maidique campus labor center, room 304 11200 sw 8th street miami, fl 33199 tel. This is a substantially smaller increase than suggested. The economic policy institutes david cooper and the heritage foundations james sherk discuss how recent increases in the minimum wage at state. However, according to a 2016 report by the economic policy institute, it hasnt really done that since 1968. The economic policy institute minimum wage tracker the federal minimum wage has not been raised since 2009. The consensus view, however, is that minimum wages at moderate levels have a small negative impact on employment and that the level of the minimum wage matters. C with a minimum wage higher than the federal minimum. Economic policy institute minimum wage simulation model using data from the census bureau, bureau of labor statistics, and.
The minimum wage is roughly 30 percent of the average wage for bluecollar factory workers and nonmanagement service employees. Economic vulnerability among us female health care workers. National institute of economic and social research, 2015. The economic cost of minimum wage hikes employment. Apr 09, 2016 the economic policy institutes david cooper and the heritage foundations james sherk discuss how recent increases in the minimum wage at state and local levels have affected local economies and. Over the years, the minimum wage has been popular with the public, controversial in the political arena, and the subject of vigorous debate among economists over its costs and benefits. Every which way and up as measured by the atlanta feds wage growth tracker, the typical wage increase of a u. Epis minimum wage tracker, which provides comprehensive data on. It is constructed using microdata from the current population survey cps, and is the median percent change in the hourly wage of individuals observed 12 months apart.
The organization was founded in 1986 by economic policy experts, including lester thurow and robert reich. The economic policy institute minimum wage simulation model uses microdata from the american community survey acs, compiled by. The wage growth tracker is the time series of the median wage growth of matched individuals. Exploring epis minimum wage tracker economic policy institute. Epis minimum wage simulation model, which we use to produce these estimates. Analyzing data from the current population survey cps, gould finds that while some workers saw modest wage growth last year, large gaps by gender, race, wage, and education level remainand some of. An economic policy institute report details the age demographics of those affected by minimum wage increases. Minimum wage simulation model technical methodology. The atlanta feds wage growth tracker is a measure of the nominal wage growth of individuals. Is 2015 the year for a boost in the national minimum wage. Raising new yorks minimum wage fiscal policy institute fpi. Inflationadjusted wages grew for most workers across the wage distribution in 2018, according to a new report by epi senior economist elise gould. Jun 22, 2017 keeping track of state, county and city minimum wage rates weve seen a significant increase in the number of labor laws passed in states, counties and cities across the country. Dec 09, 2019 cities and counties with higher a minimum wage.
David cooper, zane mokhiber, and ben zipperer, minimum wage simulation model technical methodology, february 2019. Some cities and counties also have minimum wage rates higher than their states minimum wage. By brandon mckoy, policy analyst, new jersey policy perspective and david cooper, senior economic analyst, economic policy institute to read a pdf version of this report, click here. The atlanta feds wage growth tracker wgt has shown its usefulness as an indicator of labor market conditions, producing a betterfitting phillips curve than other measures of. The epi is a nonprofit, nonpartisan think tank that produces research on the economy. The economic policy institute staff is unionized with the nonprofit professional employees union. Employment policies institute the economic cost of minimum. Do minimum wages stimulate productivity and growth. Ben zipperer joined the economic policy institute in 2016. Epi updates minimum wage tracker as minimum wages rise in two. But with an unemployment rate thats been above 20% for five summers now, perhaps its time for a day of action for those left out of the labor force as a consequence of a higher minimum wage. Reproduced from figure a in elise gould and valerie wilson, wage growth is weak for a tight labor marketand the pace of wage growth is uneven across race and gender, economic policy institute, august 2019. Rather, meanstested, prowork cash assistance programs and negative income tax schemes can deliver income to the working poor far more efficiently.
The minimum wage in 2014 was 24 percent below its 1968 level despite the fact that u. In 2005 florida voters passed an increase in the florida minimum wage, and several municipalities and miamidade county have passed living wage ordinances aimed at increasing the ability of county and city employees to achieve a decent standard of living. The lowest allowable wage to be paid to employees per hour effective minimum wage. As inflation erodes the real value of the federal minimum, twenty nine states and d. According to economists at the federal reserve board and the university of californiairvine, the majority of empirical research shows that a higher minimum wage reduces employment for the. To mark the 80th anniversary of the fair labor standards act, tsheets sat down with the economic policy institute and obermayer to ask if a depressionera law can effectively regulate the modern workplace. Nonworking families are excluded, and minimum wage gains, which are based on hourly wages reported in march of the survey year, are summed across families. Playing politics with thousands of jobs minimum wage threat proponents say that boosting the minimum wage will reduce poverty without reducing jobs. But hes happier talking about how better education would lead to bigger paychecks. National minimum wage economics bibliographies in harvard style.
Most commonly, firms raised prices 56% reported this. Wage growth tracker federal reserve bank of atlanta. Did missouri republicans pass a law lowering the st. Dec 19, 2018 such declines in the purchasing power of the minimum wage lower minimumwage workers living standards. It has become more important in a labour market characterised by a. By staff of the economic policy institute the federal minimum wage has not been raised since 2009. In the report, david cooper notes, perhaps the most common incorrect perception of lowwage workers is that they are largely teenagers and almost entirely young people. National institute of economic and social research, 2015 your bibliography. How does minimum wage affect small business in 2018 tsheets.
Jan 01, 2015 in a report he helped prepare for the economic policy institute, bernstein cited data from the congressional budget office describing the average minimum wage worker as fulltime and 35 years old. Good economic analysis cant generally be collapsed into a simple statistic. Deregulation such as a liberalisation of housing planning would create lower rent and increase living standards. Undisputed facts about the minimum wage pbs newshour. In this book, david neumark and william wascher offer a comprehensive overview of the evidence on the economic effects of minimum wages. A minimum wage policy typically has the objective of relieving poverty for those in work, so in terms of its objective could be classified as an example of a policy to raise economic welfare how successful it may be in achieving that objective is a further question.
The federal minimum wage has not been raised since 2009. A lesson in economic analysis from the minimum wage debate. The 44 citiescounties who have a higher minimum wage than their state, according to the economic policy institute, include. Increase in minimum wage would be counterproductive. In mid2018, a meme widely shared on social media decried the passage of legislation by missouri republicans that allegedly lowered the minimum wage in st. New york times columnist david brooks, in an article subtitled no, virginia, there is no class war, recently trotted out an old. Jared bernstein is senior economist at the economic policy institute in washington, d. Basic economic theory suggests that setting a minimum wage above the market equilibrium wage would result in a reduction in the demand for lowwage labour on the part of firms. Only 30 percent of the lowestpaid workers many of whom are hourly workers in the service industry have the ability to earn paid sick days, and these are the. Mar 01, 2018 the atlanta feds wage growth tracker wgt has shown its usefulness as an indicator of labor market conditions, producing a betterfitting phillips curve than other measures of wage growth. A recent hm treasury submission to the lpc, for example, estimated that raising the nmw to. Richar wellings appeared on bbc radio wm to discuss minimum wage.
Summary in recent months, politicians have urged the low pay commission lpc to consider a significant increase in the national minimum wage nmw. Amid the covid19 outbreak, workers who need paid sick days the most have the least, wrote elise gould, senior economist at the economic policy institute, in an epi article. Employer responses to a citylevel minimum wage mandate. Exploring epis minimum wage tracker economic policy. The highest minimum wage applicable when many minimum wages overlap e.
194 19 182 1300 341 396 1128 457 172 752 418 1090 683 632 839 1107 1282 717 220 572 778 47 1540 223 1065 1000 267 1303 984 273 946 1006 712 1158 1381 1183 1420 421 273 475 344 660