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Raising the Minimum Wage: Win-Win-Win

The Wyoming Department of Workforce Service's report on the Disparity of Wages and Benefits between Men & Women recommended addressing the minimum wage in Wyoming as part of an effort to close the gender wage gap and improve the health of Wyoming's economy. This was one of their "Possible Legislative Solutions":

Raise the minimum wage and raise or eliminate the tipped minimum wage – approximately 2/3 of minimum wage and tipped workers are women.

For the record, the federal minimum wage in the US is $7.25 per hour, but 25 states and Washington, DC pay more. Wyoming is one of a few states that pays less (we're tied with Georgia for last). Discussions with national businesses that depend on low-wage laborers also indicate that nearly 2/3 of their employees are women. Further, these workers are often referred to as "low-skill" or "unskilled" workers. The derisive language is part of a justification of low wages and is not only unfair but also wildly inaccurate. (We'll parse this in an upcoming post and include the data and details in a policy position on minimum wage.)

Non-economists (and a dwindling number of actual economists) often talk about raising the minimum wage as potentially detrimental to the economy. But that is changing rapidly.

According to economists (in a 2018 report enticingly titled "The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data" - you know you can't wait to read it!), raising the minimum wage not only benefits the nation's lowest wage workers, it also yields benefits for employers and businesses. In short, raising the minimum wage is a win-win-win.

The authors write, "We find that raising the minimum wage increases earnings growth at the bottom of the distribution, and those effects persist and indeed grow in magnitude over several years." Their findings also demonstrate that higher wages for lower earners decrease employee turnover, benefitting employers as well as workers.

Economist Kevin Rinz posted a helpful twitter thread on the working paper:

Recently, Business Insider tackled the subject of minimum wage as well. They revealed that 20 years of government data says raising the minimum wage could be good for workers, businesses, and the economy. (The article is part of their ongoing series: Better Capitalism.) They write:

"Raises in minimum wage benefit the majority of low-income workers in both the short and long term, argue economists for the US Census Bureau in a working paper from earlier this year, which analyzes 20 years of non-public government data. Previous studies have contended that raises in minimum wage can lower earnings potential because employers often respond to the raises by reducing hours. The findings provide compelling evidence that raising the minimum wage benefits a large majority of low-income workers by putting them on a path to higher earnings in the long term, and that in turn decreases inequality and leads to a healthier economy."

Wyoming's economy stands to benefit from raising the minimum wage. And women in our state can't afford to wait.


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