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The Minimum Wage Debate

1 August 2016

Following years of political debate surrounding wealth inequality and poverty, consumers and business owners alike will soon be seeing the actual effect of a polarizing and lasting change in several state economies. Some legislators are beginning to act on the task of increasing the minimum wage, while others are actively trying to stop the increases.

States in all regions of the United States are now responding to the concerns voiced by movements like the Fight for 15, which started to gain traction and media coverage in 2013 and 2014 for demanding higher wages at work to combat poverty in working families. It is 2016, and bills are now being voted on to address the topic of wages.

Though SB 3 was introduced in the California Senate in December of 2014, the most recent version of the bill was only recently agreed on in a Senate concurrence vote in March of this year. If signed by Governor Jerry Brown, SB 3 will gradually increase the minimum wage from $10 to $15 over a span of seven years.

In Oregon, Governor Kate Brown recently signed into law SB 1532, which will increase the minimum wage in Oregon similarly to the California bill.

An effort to lift families out of poverty and distribute wealth more evenly, these bills intend to gradually change the economy without completely shaking it. This cautiousness, however, reveals a concern from opponents of increasing the minimum wage.

Opposition bills like Alabama HB 174 and Idaho H 463 operate on the idea that raising the minimum wage will hurt the economy by directly increasing labor costs of business owners, especially small business owners who may not be able to afford the increases regardless of how slowly they are implemented. Some say this will cause unemployment and in turn hurt low-skilled wage workers.

Virginia, Idaho, and Alabama legislatures are the most recent states to pass bills prohibiting local governments from regulating or establishing minimum wage laws. HB 1371 from Virginia was ultimately vetoed in March of this year, but Alabama’s HB 174 was enacted into law with no action by Governor Robert Bentley and H 463 is currently in the works in the Idaho Senate.

In this contentious grey-area between politics and economics, legislators cannot easily declare a winner in this debate. Both sides of the argument cite supporting economic evidence and are championed by interest groups like the National Restaurant Association, Employment Policies Institute, National Employment Law Project, and AFL-CIO.

Research presented by these interest groups and policy institutes show conflicting information concerning the fate of low-wage workers. An overview of the negative effects of raising the minimum wage conducted by the National Center for Policy Analysis argues that it causes unemployment, hurts the poor, and discourages teenagers from working.

On the other hand, the National Employment Law Project published data briefs and reports using similar economic information and analysis to argue an opposing point: there is no correlation between unemployment and increased minimum wages.

Other state legislators have turned these decisions to voters by drafting ballot measures. Maine has a measure to raise the minimum wage and South Dakota has a measure to create a distinct youth minimum wage. Both measures will be on their states’ November 8, 2016 ballot.

The emergence of new and differing minimum wage policies may not solve any ideological differences among economists and politicians, but they offer a call to action that some voters and protesters have been asking for.

Veronica Tien is a student at the University of Texas double-majoring in American Studies and Economics and is a current intern with Project Vote Smart. For more information on internship opportunities with Project Vote Smart, contact us at or by calling 1-888-VOTE-SMART.



Related tags: blog, business, economics, finance, minimum-wage, state-economy

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