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Minimum Wage Hike Would Significantly Increase the Cost of Employment

Created on July 26, 2016

Minimum Wage Hike Would Significantly Increase the Cost of Employment

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Read the original report, "Raising Minimum Starting Wages to $15 per Hour Would Eliminate Seven Million Jobs," by James Sherk.

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Under current law, the average minimum cost of employing a full-time worker will be $12.84 per hour in 2021. If the federal minimum wage is increased to $15 per hour, that cost would rise to $18.61—a 45 percent increase.

Note: Figures are averages for rates across U.S. states, weighted by private-sector employment in each state. The current law estimates reflect state minimum wages set to take effect, such as New York state raising its minimum hourly wage to $15. Source: Author’s calculations using data on legislated 2021 minimum wage rates, Employment and Training Administration data on state UI taxes, and the projected employer penalty in 2021. See Appendix for details.

CHART 2 • IB 4596

Tags: minimum-wage, 15-hour, Pay-Workers-a-Living-Wage-Act, jobs