Recently, California and New York each passed state laws that will set their states on a path to a $15 minimum wage. In this they join several major cities such as Seattle and may encourage more states to yield to the pressure from unions backing the #FightFor15. Even if no place else moves to a $15 per hour minimum wage, by 2022 somewhere around one out of five American workers will be employed in states with that standard. Yet, from everything we know about economics and labor markets, this “victory” for labor will come at a steep cost for those workers who will lose their jobs for the benefit of those who don’t and the unions pushing this campaign.
Figuring out exactly what will happen is complicated for two reasons: only a limited number of studies have examined a $15 minimum wage because more attention was given to more plausible changes such as $9 or $10 and because this will not be a national policy, but only local. That means employers can shift jobs to other states with lower minimum wages rather than having to take the larger step of leaving the country. That means both that the local job losses could be larger and that the national job losses may be smaller than if a national policy change were implemented.
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