Does raising the minimum wage increase or decrease employment?

Raising the minimum wage would increase the cost of employing low-wage workers. As a result, some employers would employ fewer workers than they would have under a lower minimum wage. However, for certain workers or in certain circumstances, employment could increase.

How do minimum wage hikes happen?

And increasingly, minimum wage hikes also occur automatically through annual indexing based on cost-of-living increases derived from the consumer price index.

What is the relationship between minimum wage and inflation?

In theory, raising the minimum wage forces business owners to raise the prices of their goods or services, thereby spurring inflation. In reality, the relationship between rising wages and inflation is more complex: Wages are only one part of the cost of a product or service paid for by consumers.

Should the federal minimum wage be indexed to the CPI?

Past increases in the federal minimum wage have not been indexed, so the value of those increases has been eroded by inflation. Leave the minimums unchanged after the end of the phase-in period; Index minimum wages to the consumer price index (CPI), a common measure of the cost of living; or Index minimum wages to median hourly wages.

Do minimum wage hike prices rise after the hike?

Moreover, increases in prices following minimum wage hikes generally have occurred in the month the minimum wage hike is implemented, and not in the months before or the months after. Based on their research, they also make the claim that a “small” minimum wage hike (between five and 15\%) does not lead to higher prices.

How many states raised minimum wage in 2019?

NPR’s Audie Cornish speaks with David Cooper, senior economic analyst for the Economic Policy Institute, about minimum wage increases in 2019. Millions of American workers celebrated the new year with a pay raise. Minimum wage increased in 20 states and 21 cities.