Study: $15 minimum wage will cause massive job losses in key industries

By Rob Roper

The latest analysis of the $15 minimum wage is by a team of economics professors from Miami University and Trinity University and looks at California. This study, California Dreamin’ of Higher Wages, concludes that:

A 10% increase in the minimum wage would cause a nearly five-percent reduction in employment in an industry where one-half of workers earn wages close to the minimum. In an industry with an average share of lower-wage workers, their findings imply that each 10% increase in California’s minimum wage has reduced employment for affected employees by two percent.

Consider that Vermont is debating a 50 percent increase in the minimum wage over a handful of years, and consider also the finding that the industries most negatively impacted by minimum wage increases proved to be accommodation/food services and retail trade (55 percent low wage), followed by agriculture, forestry, fishing and hunting (46 percent low wage).

That right there is a pretty good description of a huge part of Vermont’s economy, and we do not have Silicon Valley here to compensate.

Vermonters should also be paying close attention to this analysis because California’s and Vermont’s minimum wage histories are very similar. Both states began raising their minimum wages above the federal rate in the late 1990’s, and have followed similar trajectories ever since.

Now California is scheduled to raise its minimum wage from $10.50 in 2017 to $11.00 in 2018, and then increase $1 per year until it reaches $15 in 2022. Vermont, just one year behind, will go from $10 to $10.50 on January 1, 2018, and, should the legislation under consideration pass, follow a similar path to $15 by 2022 or shortly thereafter.

The California study concludes that, “In these industries [food services and retail trade], we project 10.7 and 9.5 percent of jobs will be eliminated as a result of a $15 minimum. … These two industries account for half of the predicted job loss.”

Tell us again how a $15 minimum wage is supposed to help low-wage Vermonters?

Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Seattle City Council/Public domain

2 thoughts on “Study: $15 minimum wage will cause massive job losses in key industries

  1. I’d be on board with 50% increase in the minimum wage ONLY if there was a 50% decrease in the welfare rolls. Ain’t gonna happen. Wait til Starbucks raises their prices- then and only then you’ll hear the whining of the Left.

  2. The lure of the free lunch is strong among the weak minded. It is what allows scams to work and forever hook new suckers.

    Stupidity is the only condition for which there is no cure; it is terminal and leads to death without fail.
    TANSTAAFL is a prophylactic if taken and used intracranially on a daily basis.

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