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Manhattan Institute

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Counterproductive - The Employment and Income Effects of Raising America's Minimum Wage

issue brief

Counterproductive - The Employment and Income Effects of Raising America's Minimum Wage

July 27, 2015
Urban PolicyOther
EconomicsOther

Executive Summary

By eliminating jobs and/or reducing employment growth, economists have long understood that adoption of a higher minimum wage can harm the very poor who are intended to be helped. Nonetheless, a political drumbeat of proposals—including from the White House—now calls for an increase in the $7.25 minimum wage to levels as high as $15 per hour.

Key Findings

  • While a minimum-wage hike would benefit millions of workers with higher earnings, it would also hurt millions of others who would lose earnings because they cannot attain or retain a job.
  • Raising the federal minimum wage to $12 per hour by 2020 would affect 38.3 million low-wage workers and cost 3.8 million low-wage jobs.
  • Increasing the federal minimum wage to $15 per hour by 2020 would affect 55.1 million workers and cost 6.6 million jobs.

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