Washington, DC—According to new analysis, it is state level increases to the minimum wage, not the Trump tax bill or the tight labor market, that is responsible for unprecedented wage growth, especially for low wage workers. Many states have raised the minimum wage over the last few years, and the data shows that it pays off for everyone.
“States that have raised the minimum wage are seeing the rewards. It’s becoming clearer and clearer that raising the wage is good not only for hardworking families, but the economy as a whole,” Anna Scholl, Executive Director of Progress Virginia, said. “Everyone should have the opportunity to work hard and raise their family with dignity, Virginians included. We hope that this year, legislators will invest in our communities increasing the minimum wage to $15. Republicans and corporate special interest groups have been blocking an increase in the minimum wage for years, but we are hopeful that with new leadership, all Virginia families will be able to feel financially secure and thrive in their communities.”
Minimum wage increases fueling faster wage growth for those at the bottom [Washington Post, Andrew Van Dam and Rachel Siegel]
“Competition for workers at all levels, including low-skilled ones, has intensified. But can it really be a coincidence that the boom in wage growth came at a time when around half the U.S. states raised their minimum wage? The data suggests that minimum-wage-law changes also played a role.”
“A hot labor market helps, but policies that increase the minimum wage are a ‘really meaningful part of wage growth for low-wage workers,’ said Heidi Shierholz, senior economist at the Economic Policy Institute. ‘That is absolutely, undeniably true.’”
“Sure enough, the data suggests that folks aren’t just getting paid more because there’s more competition for their services. They’re getting paid more because laws now requires employers to pay them more.”
“Over the past year, paychecks for those in bottom 25 percent of the workforce grew almost 1.5 times faster than for those in states where the minimum wage didn’t budge. Also, workers age 20 and under fare better in states that raised the minimum wage.”
“By contrast, wages for most workers don’t reflect the same pattern. The other 75 percent of the workforce didn’t see pay hikes to the same degree, even in states where minimum wage increased. That reinforces the idea that rising minimum wages are the main reason that low-wage workers are doing better, as opposed to other forces.”
“The wage hike move was controversial, as Arkansas business owners worried about the labor costs associated with paying employees more and warned of job losses.
But that didn’t happen. In November, the Arkansas unemployment rate was 3.6 percent, down from 3.7 percent a year earlier.”