The federal minimum wage of $7.25 per hour has not changed since 2009. Increasing it would raise the earnings and family income of most low-wage workers, lifting some families out of poverty—but it would cause other low-wage workers to become jobless, and their family income would fall.

Who is impacted most by a change in minimum wage?

The first column looks at those directly affected by the minimum wage increase (i.e., workers whose earnings are between their state’s current minimum and $6.15). Most of these workers (59.7%) are female, and about 71% are adults (age 20 or older).

How does a minimum wage affect the labor market?

While increases in the minimum wage are found to significantly decrease employment of workers in low concentration markets, minimum wage-induced employment changes become less negative as labor concentration increases, and are even estimated to be positive in the most highly concentrated markets.

How will employers respond to an increase in the minimum wage?

How will employers respond to an increase in the minimum wage? They reduce their labor force and/or hire more experienced, skilled workers. Suppose that the minimum wage has increased from the current level to $15 per hour.

How does minimum wage affect the wage distribution?

Since minimum wages increase wages at the bottom of the wage distribution, and likely those just above the minimum wage through spillover effects, increases in minimum wages are likely to result in lower wage inequality.

Who are the winners and losers of the minimum wage increase?

The priced-out jobs clearly distinguish winners and losers under the new higher minimum wage level. Workers who remain employed will benefit from the wage increase, while workers who become unemployed will be the losers under the new wage regime.

What is the definition of a minimum wage?

Minimum wages have been defined as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”.1. This definition refers to the binding nature of minimum wages, regardless of the method of fixing them.

Is the minimum wage going up in 2020?

Target similarly announced in 2018 that it would be raising its minimum rate of pay to $15 by 2020. Research can be found both supporting the economic impact of minimum wage increases and citing it as a cause for higher prices and lower employment. Some standard arguments in favor of a higher minimum wage include: