Those in support of the $15 minimum wage have fought to enact the policy nationally but often overlook its varying impact on each state, according to a report Wednesday.
Supporters of the increase have argued the policy could help address poverty. Critics, however, warn it could limit job opportunities because it increases the cost of labor. In a new report, The Heritage Foundation warns the policy will have a vastly different impact in each state because they have different costs of living.
“Many businesses might respond to a $15 mandate by eliminating positions, cutting hours, and looking for new ways to implement labor-saving technology,” the report detailed. “States with lower living costs would experience relatively greater job losses.”
People in states with a lower cost of living usually pay less for products and services. Their wages tend to be lower, too, as a result. States with a high cost of living tend to have higher wages already, meaning the impact of a national $15 minimum wage will be less severe in those areas.
“For example, New Jersey and Georgia have similar total employment,” the reported went onto say. “However, Georgia would lose almost twice as many jobs to a $15 mandate.”
Lawmakers most often design the policy to phase in over a few years to help mitigate its economic impact. The report took that into account and calculated potential job loss if the policy was phased in nationally by 2021. New York and Washington D.C. showed no impact because they will have already implemented a $15 minimum wage by that year.
“These estimates provide important information about the impact of large minimum-wage increases on job opportunities and poverty,” the report concluded. “Efforts to create jobs and reduce poverty should not center on forcing employers to pay higher starting wages.”
California was the one other state that has already passed the increase. The report showed the state will lose 193,000 jobs because it would have only reached $14 an hour by 2021. Arkansas would have the biggest impact at 46.5 percent of workers directly impacted by the policy resulting in 101,000 jobs lost.
The Heritage Foundation is a think-tank that typically studies issues from a conservative economic perspective. Researchers at left-leaning institutions have found an increased minimum wage will yield mostly positive results. The University of California, Berkeley found any losses would be marginal compared to the potential benefits.
The Fight for $15 campaign has been at the forefront of the policy push. It has utilized rallies and media campaigns to advocate for the policy since it started in 2012. The movement is primarily funded by labor groups like the Service Employees International Union.
Vermont Sen. Bernie Sanders has been a leading voice backing the issue. He made the policy a cornerstone of his presidential run and even introduced legislation in July 2015 that would have enacted the increase nationally.
