INCREASE JOB OPPORTUNITY, NOT

THE MINIMUM WAGE

FACTS ON THE $15/HOUR MINIMUM WAGE HIKE
The net economic effect of minimum wage laws is to make less skilled, less experienced, or
otherwise less desired workers more expensive thereby pricing many of them out of jobs.
Thomas Sowell

The Government admits raising the minimum wage would destroy jobs.

The non-partisan Congressional Budget Office has confirmed that increasing the
federal minimum wage to $10.10 per hour would kill 500,000 jobs. Increasing the NJ
minimum wage to $15 dollars per hour would only increase the numbers of jobs lost.

Minimum wage increases are already causing job losses in cities where they
pass.
Seattle recently enacted a minimum wage increase that goes in gradually from $11
to $15 per hour. Earlier this year, when the $11 an hour increase happened, Seattle
experienced the largest loss of restaurant jobs since January 2009, during the height
of the recession.

Since 1990, 80% of studies have found that increasing the minimum wage
causes companies to cut jobs. By reducing full-time employment opportunities,

minimum wage hikes prevent low-skilled workers from gaining on-the-job experience
and make it more difficult for young people to enter the job market, hurting economic
mobility for all.

A minority of a minority of workers earn the minimum wage.

According to the Bureau of Labor Statistics, only 2.5% of all workers make the minimum
wage. Of that, 31% are teenagers and 55% percent are under 26. This means only 1.1%
of all workers 26 and older are making the minimum wage. In 1980, 15% of hourly
workers earned the minimum wage. Only 4.7% of hourly workers today make the
minimum wage.

The majority of those working for minimum wage arent primary bread winners.

63% of workers who earn less than $9.50 an hour are the second or third earners in
their family and 43% of these workers live in households that earn over $50,000 per
year.

Minimum wage earners are largely not trapped in poverty.

In reality, minimum wage jobs are viewed by many as the first step in a long career
path. Nearly two-thirds of minimum wage earners gain pay raises within the first
year of employment. From 1981 to 2004, the median annual growth in wages for

minimum wage employees was nearly six times that of employees earning more than
the minimum wage. These are raises earned through training and work experience
not government mandates.

A drastic minimum wage hike will replace more workers with machines.

Companies such as McDonalds and Panera Bread are already experimenting with
orders being taken by computer terminals rather than workers. Artificially increasing
the cost of labor will simply lead to automation of more minimum wage jobs and
fewer opportunities for entry level workers.

Unions often try to exempt union workers from the minimum wage.

While unions such as the AFL-CIO have been a large part of the Fight for 15 they
have also been aggressively lobbying for an exception to the increased wages. They
hope to use this exception to bolster their ranks by supplying low wage workers to
hotels and fast food chains. The minimum wage is also the basis for the negotiation of
salaries in many union contracts. So an increase in the minimum wage can artificially
drive up the cost of labor for the whole operation.

Minimum wage increases disproportionately hurt small businesses.

While larger businesses such as Costco may be able to absorb an increase in the
minimum wage, smaller mom and pop businesses are less able to absorb the labor
cost increase and might have to close their doors. For example a Los Angeles group
of actors actually sued to prevent a $9 minimum wage from applying to their local 100
seat small theater. They knew that a higher minimum wage would force their theater
to close.

Increasing the minimum wage does not stimulate the economy.

Research has found no link between an increased minimum wage and economic
growth. One study found that while minimum wage increases have no effect on GDP
generated by more highly-skilled industries, there may be small to modest declines
in GDP generated by low skilled industries, which cannot as easily afford the higher
mandated labor costs.

WHATS THE SOLUTION?

We need to make it easier for entrepreneurs and small business owners to grow and
hire workers by reducing the burden of taxes and red tape.
Americans for Prosperity supports free market policies that enable every New Jerseyan
to live a more prosperous life and his or her version of the American Dream.

550 West Main Street, Suite 5, Boonton NJ 07005

New Jersey State Director Erica Jedynak
E: EJedynak@afphq.org | M: 862-229-4953