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.
How do minimum wage laws and safety laws affect wages and wage levels?
Minimum wage laws, which set a legal minimum amount that employers can pay for most types of work, raise wages above the equilibrium wage for unskilled labor. Safety laws, which increase safety at work in dangerous jobs, decrease wages because workers are willing to work for lower wages when jobs are safer.
How does minimum wage affect employers and employees?
Increasing amounts of evidence from the US indicate that higher minimum wage levels lead to fewer jobs. Studies that focus on the least-skilled workers find the strongest evidence that minimum wages reduce jobs. Targeted tax credits do a better job of reaching the poor than minimum wages do.
Do minimum wage laws affect all workers?
Minimum wage coverage, however, is not universal. Some employers of low-income workers are not obligated to provide minimum wages to all employees. The Fair Labor Standards Act (FLSA) of 1938 established federal rules regarding minimum wages, overtime pay provisions, and child labor standards.
How does minimum wage affect the labor market?
Researchers consistently find that minimum wage laws raise pay for workers at the bottom rungs of the labor market. These increases include both directly affected workers (those earning between the old and the new minimum wage) as well as those indirectly affected (those earning above, but near, the new minimum wage).
How does increasing minimum wage affect family income?
However, income would fall for some families because other workers would not be employed and because business owners would have to absorb at least some of the higher costs of labor. For those reasons, a minimum-wage increase would cause a net reduction in average family income. How did CBO estimate effects on family income?
How many local minimum wage laws are there?
Localities with larger increases have been more likely to implement them in several steps. Across the localities, the average per-step minimum wage increase is 16.7 percent. The nine laws are similar in covering the large majority of work that is performed within the boundaries of their cities or counties.
Are there any laws for minimum wage in San Francisco?
Two of the nine laws (San Francisco and San Jose) follow their state’s law in treating tipped workers the same as non-tipped workers, maintaining a uniform minimum wage for both groups. The other seven laws follow their states’ laws in maintaining a lower minimum wage for tipped workers (even as some increased the base wage for tipped workers).
