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10 September
2015

Wages


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Impact of subnational minimum wage increases in the United States


Jacqueline Odum, CAP

This report was featured as a chapter in “GLOBAL WAGE DEBATES: POLITICS OR ECONOMICS?” a joint report co-authored by the global partners of JustJobs Network.

America’s working class families have witnessed a daunting trend over the last 30 years – one marked by wage stagnation and rising costs. Worker productivity rose by nearly 65 percent, yet American workers saw their wages remain stagnant in real terms, and in some cases, even decline. At the same time, the costs of key components to middle class security – such as childcare, higher education, health care, housing, and retirement – have risen, diminishing the prospect of the American dream. This tension between rising costs and wage stagnation is the defining issue of our time. It affects all households, but is a particularly acute concern for low-wage workers, since rising costs are swallowing an increasingly large share of their household income.

This report examines the economic effects of minimum wage increases and provides new analysis while drawing upon existing literature to assess the following:

  1. How inadequate minimum wage levels have historically contributed to rising income inequality
  2. The impact minimum wage increases have on employment levels
  3. The effect that minimum wage increases have on businesses and labor costs

 


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