Raising the minimum wage would help a lot of Americans. It would raise wages for 35 million workers, bring 4.5 million people out of poverty, and reduce the wage gaps that plague women and people of color. Local movements to raise the minimum wage have started to take hold—30 cities have raised their minimum wages since 2014—but the minimum wage has not been increased at the federal level for seven years.
For decades, the main argument conservative policymakers and business leaders have been making against raising the federal minimum wage is that it will bring about economic doom in the form of massive job losses. In 1980, then-Governor Ronald Reagan declared that “the minimum wage has caused more misery and unemployment than anything since the Great Depression.” Today’s conservatives seem to agree, with Ted Cruz warning that “every time we raise the minimum wage, predictably what happens is a significant number of people lose their jobs.” Speaker Paul Ryan has dared to get specific with his doomsday predictions, saying “when you raise the minimum wage, you’ll lose over a million jobs.”
New analysis from the Center for American Progress Action Fund shows that this isn’t the case. From 1993 to the second quarter of 2015, cities raised their minimum wage 43 times. In 74% of these occasions, the unemployment rate did not increase a year after the minimum wage hike. Of the 11 cases where the unemployment rate rose a year after the minimum wage increase, six were during the Great Recession when the unemployment rate rose across the United States. Due to data limitations, the analysis was unable to evaluate more recent minimum wage increases that have occurred later in the economic recovery.
SCROLL TO CONTINUE WITH CONTENT
An existential threat to our democracy. A global pandemic. An unprecedented economic crisis. Our journalism has never been more needed.
Can you pitch in today and help us make our Fall Campaign goal of $80,000 by November 2nd?
Please select a donation method:
By themselves, these findings aren’t enough to prove that the minimum wage does not cause job losses—but when they’re paired with the numerous academic studies that have also found that raising the minimum wage has no discernible effect on unemployment, it does poke holes in conservatives’ reasoning.
As the argument against raising the minimum wage becomes increasingly fuzzy, the argument in favor of raising it stays crystal-clear. The current minimum wage is a poverty wage: a family with one child and a single parent working full-year, full-time for the federal minimum wage would be below the poverty line for a family of two. Raising the minimum wage would help these workers directly, and it would have ripple effects throughout the entire economy—it would reduce inequality, increase the GDP, and even create modest job growth.
It’s clear that conservatives’ claims about the impact of the minimum wage do not square with the evidence. Cities that have raised the minimum wage have not experience massive job losses or economic ruin. And with the minimum wage losing value every year it is not hiked, many cannot afford continued opposition to increasing the federal minimum wage.