The push for raising the minimum wage has seen some serious success so far this year. Seattle was the first city in the U.S. to implement a $15 minimum wage during last spring. New York City and Los Angeles have followed suit, voting to raise minimum wage to $15 by the end of 2018.
Democratic presidential hopefuls are pushing for a similar nationwide increase. Bernie Sanders and Hillary Clinton both have plans to make it so, but what exactly would that look like? Are the fears of some economists that jobs will be lost true? Will raising the minimum wage also expand the American middle class as planned?
Gauging the Effects of a Minimum Wage IncreaseEconomists are able to make educated guesses as to what the likely effects of raising minimum wage would be by examining the ration of minimum wage to the median wage, the absolute middle of wages in a city. The higher the ratio of minimum to median wages, the higher the benefit to workers.
However, jobs are more at risk the higher the ratio gets as well. Many experts state that certain cities are capable of sustaining increases around 50 percent. Even some of the more optimistic economists express concern at raising the minimum wage to $15, a 60 percent increase.
The median wage in Dallas was $22.92 per hour back in May of 2014. Going off of that number, the $15 minimum wage would create a ratio of 65 percent. There has never been a wage increase of that magnitude in the U.S. that economists can use to accurately predict how a 65 percent increase would affect the city.
Michael Reich, an economics professor at the University of California, has said that while it would be irresponsible to say that the risk would never outweigh the reward, there has been no evidence that a 65 percent increase would do more harm than good. “We know that hasn’t happened at 50 percent or 55 percent,” he stated in a recent interview. He feels that there is a tipping point where an increase could go too far, but that it is higher than $15.
Atkerson Law Firm – Dallas employment lawyer