Editor’s note: This article has been updated to reflect other perspectives on the effect of raising the federal minimum wage.
NEW YORK, NY — A new interactive map shows how workers in each congressional district nationwide would see a pay bump if federal lawmakers pass the “Raise the Wage Act of 2019.” Nearly 40 million workers would see their paychecks go up if the federal minimum wage was raised to $15 an hour by 2024, according to the Economic Policy Institute, a liberal-leaning think tank.
The EPI’s map, released Wednesday, shows that workers in the South would particularly benefit from the legislation, with many Congressional districts seeing 35 percent or more of workers seeing a pay raise. The map also breaks down the share of workers who would benefit by age, gender and race.
For example, in one of the starkest examples, the EPI says 49.9 percent of workers in Texas’s 34th district would be affected. Here’s a breakdown of what would happen in that district if the legislation passed:
David Cooper, senior economic analyst at the think tank, said in a release the map shows a “detailed picture” of where congressional action can “help the most people.”
“Lawmakers have let the federal minimum wage erode to the point where today’s low-wage workers earn significantly less than their counterparts did 50 years ago,” he said.
The federal minimum wage was established in 1938 as part of the Fair Labor Standards Act. The goal of the legislation was to ensure workers were fairly compensated and that regular employment would lead to a “decent quality of life,” according to the EPI. Lawmakers in Congress thus periodically have to increase the wage so that workers in the lowest-paying jobs can still make ends meet and share in the rewards when the economy sees improved productivity, wages and quality of life.
But raising the minimum wage all the way to $15 an hour might not be all sunshine and roses for America’s lowest earners. If that were the case, it likely would’ve happened already.
Most mainstream economists agree it would increase the average earnings for low-wage workers, But they also agree it would likely result in many workers losing their jobs.
What’s less clear is just how many would be lost.
If you listen to the Employment Policies Institute, a business group, up to 2 million jobs could be lost by passing the legislation. The Heritage Foundation, a right-leaning think tank, says increasing the minimum wage to $15 an hour could result in 7 million lost jobs. This is because employers would react strongly to higher labor costs, they say, and reduce employment.
“Such a large increase in starting wages would make it difficult for less skilled workers to find jobs,” wrote James Sherk, research fellow at the organization. “Employers will not pay workers more than the value they produce. Employers would respond by reducing employment of affected workers by approximately one-fifth, eliminating roughly seven million [full-time-equivalent] jobs.”
Doomsday predictions of massive job losses are, however, challenged by other research, including a statistical analysis on the actual effect of the minimum wage on employment. That analysis, published in the Tuck School of Business at Dartmouth College, suggests the two aren’t as inextricably linked as many prominent economists and business groups would have you believe.
The working paper identified dozens of U.S. data analyses conducted since 2000 and found that the minimum wage’s impact on employment is muted. For one thing, teens aren’t working as much as they used to. Moreover, restaurants are much more popular than they used to be.
“Rather, over the last 15 years, the labor market has become much less important to the lives of teenagers and teenagers have become much less important to the functioning of the labor market,” the authors of the working paper said. “On the other hand, over the last 25 years, importance of Eating and Drinking Establishments to the labor market has grown, with their share of employment increasing by at least 25% (both for production and non-supervisory workers, and for all employees).”
In other words, the country’s labor market has drifted towards a workforce that is less responsive to minimum wage changes, the paper asserts.
The Economic Policy Institute, which published the interactive map, addressed concerns over job losses citing the above statistical analysis as well as other research that indicates narrowly focusing on possible employment effects is a “deeply flawed” method of evaluating the merits of a policy. What matters, they said, is how a worker’s total earnings are affected, not their work status.
There is a “high degree of churn” in the low-wage labor market, and they cycle in and out of jobs frequently, the EPI said. So any reduction in hours would probably be spread across many low-wage workers. This means some will work fewer hours per week and some will see longer periods of unemployment, but they will all be earning more per hour than they would have otherwise.
“It’s entirely possible that few, if any, workers will actually see a reduction in their total annual take-home pay,” the EPI said.