Minimum Wage Hikes Are Crushing Jobs in These Cities

Date: January 22, 2016 Last Edit: February 11, 2016

Recent evidence is highlighting the damage of minimum wage increases across the country, including the “economic death wish” of a $15 minimum wage.

Washington D.C. restaurants are facing greater challenges now than during the recession, according to a new report. And the city’s not alone.

Following minimum wage hikes that kicked off with 2016’s start, Chicago, Oakland and San Francisco have sunk to five-year employment lows in the leisure and hospitality fields. And in Seattle, the loss of 1,000 restaurant jobs followed the state’s minimum wage increase, according to federal data.

HELP COMBAT MINIMUM WAGE HIKESJoin NFIB’s fight to keep the minimum wage at levels businesses can afford.

In Washington, D.C., a minimum wage increase to $10.50 per hour has cost the city more than 700 food jobs in one year, according to recent evidence from the American Enterprise Institute. Yet, in the four years leading up to the increase, D.C.’s restaurant sector experienced an annual growth rate of 3 percent, adding more than 2,000 food jobs every year.

However, in D.C.’s surrounding areas where wages remained the same, restaurant employment rates reached an all-time high in 2015, adding nearly 5,000 jobs.

New Year, New Challenges 

And yet, 14 states implemented an increase in the minimum wage at 2016’s start. Moreover, at the latest Democratic debate, both Hilary Clinton and Bernie Sanders vowed that raising the federal minimum wage to $15 would be a top priority during their first 100 days in office.

Mark Perry, a University of Michigan professor who published the D.C. labor market findings for AEI, equated the proposal for a $15 minimum wage to an “economic death wish” on Twitter

Alan Krueger, a Princeton University professor and the former chairman of Pres. Barack Obama’s Council of Economic Advisers, also warned about raising the minimum wage that high

“A $15-an-hour national minimum wage would put us in uncharted waters,” he said. “Although the plight of low-wage workers is a national tragedy, the push for a nationwide $15 minimum wage strikes me as a risk not worth taking.”

Salim Furth, a research fellow in macroeconomics at The Heritage Foundation, echoed Krueger’s advice.

“Cities like Portland, Maine, and Buffalo, N.Y., that are just beginning to implement similar minimum wage increases should slam on the brakes before too much damage is done,” he said. “Once you kill a downtown, it’s hard to bring it back.”

photo credit: Bill Shrout

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