7/20/2023 0 Comments Federal minimum wage increase![]() ![]() If that baseline wage had risen along with the nation's productivity growth since 1968, it would have reached almost $21.50 an hour in 2020, according to an analysis from the Center for Economic and Policy Research. The federal minimum wage was last increased on July 24, 2009, when it rose to $7.25 an hour. To learn more about employment and the US economy visit our COVID-19 Impact and Recovery Hub.The federal minimum wage "was designed to keep people out of poverty, and now it's keeping people in poverty in a dramatic way" in the states where the federal minimum wage remains the law, she added. Other possible effects are changes to company pricing strategies, working conditions, higher-wage worker compensation, and benefit eligibility for low-income households. Experts have analyzed the effect that minimum wage increases have on hours worked by employees, employee productivity, job creation, production, and forms of non-cash compensation such as health insurance. Raising the minimum wage can have an array of effects that are not reflected in employment data by state. What are other effects of raising the minimum wage? From 2015 to 2016, national employment rose 1.78% while employment in the occupations increased by 3.2%.įrom 2017 to 2018 national employment rose 1.56% while employment in the occupations increased by 1.4%. ![]() Similar trends followed minimum wage increases in 20, where the increases in national employment were lower than increases in the food preparation and serving occupations. The national employment increase exceeded that of the occupations nationwide from 2017 to 2018.įrom 2010 to 2011, national employment rose 1.2%, while the food preparation and serving occupations employment rose 1.7%. How do these employment gains compare to national employment levels?įor the year following minimum wage increases in 20, increases in employment across all states for the food preparation and serving-related occupations increased more than national employment. The states within each group are wide-ranging, with different population demographics and growth rates, varying geographic regions, and economic profiles. Nineteen of the areas with minimum wage increases were divided up into three groups, states that raised their wages in 2010, 2015, or 2017. These states averaged a loss of 2,156 employees or a 1.9% decrease in jobs.Ĭomparing changes in employment within the occupations for states that raised their minimum wages to those that did not can provide some insight into the impact of government pushing wages up. Nine states had decreases in employment for the occupations following minimum wage increases. These areas average 8,666 more jobs in the occupations, an average increase of 2.7% in employment. In 22 states, including Washington, DC the number of jobs increased in the occupations in the year after a minimum wage increase. Thirty states and Washington, DC have raised their minimum wages since the last time the federal government introduced the rate. What happens to employment after an increase in minimum wage? The last time the federal minimum wage was raised was in July 2009. Twenty states either have minimum wages equal to the federal rate of $7.25 or have no minimum wage law, in which case the federal rate applies. ![]() Some states raise their minimum wages in stages to reach a set number. For example, 18 states and Washington, DC automatically adjust their minimum wages based on inflation. States increase their minimum wages in several ways. Since 2014, 30 states and Washington, DC have increased their minimum wages. How many states raised their minimum wages in the last decade? If workers are making more, does that put more money back into the economy?Īn analysis of government data can provide some insight into these questions, even if it can’t specifically say whether minimum wage increases, on its own, increase or decrease employment in a state. If the cost of paying workers goes up, will businesses try to get by with fewer workers to save money? The federal government sets a national minimum wage, but state governments can raise theirs higher.īut there is a decades long debate among economists, policy experts, and many others about what effect raising the minimum wage would have on the number of jobs. One way the government can impact worker pay is by raising the minimum wage. Inflation is at 40-year highs, and wages are not rising fast enough to keep up.
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