Minimum wages are rising in 21 states today. The minimum wage is going up to $16.50 in California, $16.35 in Connecticut, $15.50 in New York State, $15.49 in New Jersey, $15 in Illinois, Delaware, and Rhode Island, $14.81 in Colorado, $14.70 in Arizona, $14.65 in Maine, $14.01 in Vermont, $13.75 in Missouri, $13.50 in Nebraska, $12.41 in Virginia, $11.50 in South Dakota, $11.13 in Minnesota, $10.70 in Ohio, and $10.50 in Montana.
Raising the minimum wage to more than $15 per hour can cause significant job losses in areas with low median wages. In such areas, living costs are often low, too, and a married couple each making $15 an hour can live a middle-class lifestyle and afford their own home. There are dirt-cheap counties in the U.S. where the median hourly income is around $15 an hour, yet most people there own their own home, and have a decent quality home that is bigger than the average European lives in, because it costs so little to live there. Working-class Americans typically live in bigger homes than middle-class Europeans.
When the minimum wage is increased beyond a certain level, employers can’t pass the cost of a minimum wage increase on to their customers, and they start laying off employees instead.
Minimum wage hikes increase consumer prices, as economists have found. An April 2019 survey found that “minimum wage hikes usually mean higher menu prices and fewer employee hours” in restaurants.
Minimum wage hikes can lead to tax increases. In 2016, California’s legislative analyst estimated that the gradual increase in California’s minimum wage to $15 an hour would cost taxpayers $3.6 billion more a year in government pay alone. Easy-to-perform, unskilled jobs in state and local governments historically often paid less than $15 per hour. States had no difficulty hiring people for far less than $15 per hour, because those government jobs were not demanding, and often came with excellent benefits.
California has a minimum wage for fast-food workers that is higher than its general minimum wage. California fast-food workers have to be paid at least $20 per hour. That high minimum wage caused a number of fast-food franchises to close, and resulted in others firing some employees. Franchise owners of Pizza Hut and Round Table Pizza laid off around 1,280 delivery drivers in preparation for the wage hike, reported the Wall Street Journal.
