Fight for $15? New study finds minimum wage increase would cost millions of jobs
By Jack Barnes
With “Fight for $15” protests planned for today in 340 cities, a new R Street Institute policy study—co-authored by R Street associate fellow and Marquette University economics professor Andrew Hanson and Texas Christian University economics professor Zachary Hawley—finds that a one-size-fits-all federal minimum wage increase would lead to significant job losses among the poorest workers.
A $15 hourly minimum wage would represent a dramatic increase in labor costs for many employers and the cost increase would be spread unevenly across industries, metropolitan areas and the wage distribution. The rise in the cost of labor under a $15 minimum wage would result in substantial job loss, with significant variation across industries and cities. the authors write.
“The New York metro area alone would lose approximately 170,000 jobs, while Los Angeles, Chicago and Houston each would lose more than 100,000 jobs,” they add. “Nationally, 1.7 million workers in the food preparation and serving industry would lose their jobs, while more than 900,000 workers in office and administrative support occupations would lose their jobs.”
Just as concerning, the study finds that the considerable job losses under a $15 minimum wage would hit the poorest workers hardest. For example, in Chicago, the poorest 10 percent of wage earners would endure 28 percent of the job losses, while in Boston, the poorest 10 percent would face 38 percent of the job losses.
“The minimum wage is too blunt an instrument to be a useful policy to help improve the lives of the working poor,” the authors conclude. “Although it may help partially realize a policy goal to increase incomes for some workers, it comes with the terrible cost of job destruction for some of America’s poorest workers.”
R Street is a nonprofit, nonpartisan public policy research organization whose mission is to promote free markets and limited, effective government. It has headquarters in Washington, D.C. and five regional offices across the country. Its website is www.rstreet.org.
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