A 2019 analysis by the nonpartisan Congressional Budget Office found that increasing the minimum wage nationally to $15 by 2025 would boost the wages of 17 million Americans but would lead to 1.3 million to lose their jobs. (Some economists have argued that the earned income tax credit, which refunds taxes owed by low-income families, would avoid job losses while targeting those who need help the most.)

Proponents of raising the minimum wage, meanwhile, see it as an opportunity to put money back into people’s hands to boost the broader economy, while reducing poverty and narrowing income inequality. For example, one recent study found that higher minimum wages have been a major factor in helping to close the black-white earnings gap.

US president-elect Joe Biden has signaled support for raising the federal wage to $15 an hour. But if the Republicans continue to control the Senate, an increased federal minimum wage will be harder to passand more minimum wage increases are likely to be proposed and passed at the state level, says Paul Sonn, state policy program director for the National Employment Law Project, which advocates for raising minimum wages.

According to Sonn, Delaware and Rhode Island are likely to mandate increases in 2021, and wage campaigns in Ohio and Idaho, which were in the works but set aside due to the pandemic, are likely to reappear in the near future, possibly landing on the ballot in 2022.

Minimum wages and the cost of living

Economists in the past have expressed concern that increases to the minimum wage could hurt employment in low-wage areas, since the wage hikes would be relatively steep in those places. But a 2019 working paper from Berkeley’s Institute for Research Labor and Employment suggests that a $15 minimum wage would not cause job losses in low-wage areas—and indeed there’s a growing number of states with minimum wages now at $15, or close to it, covering workers who live far outside of the country’s most expensive cities.

That includes Washington state outside of Seattle, Oregon outside of Portland, New York state outside of the New York City metro area, California outside of the coastal cities, Illinois outside of the Chicago area, and all of Florida. None of these places has a particularly high cost of living, as Michael Reich, an economist at the University of California, Berkeley, points out.

Meanwhile, even relatively low-wage states including Missouri and Arkansas also have implemented state minimums above the federal level.

There “really isn’t a good example of a too-high minimum wage,” says Ben Zipperer, an economist at the left-leaning Economic Policy Institute.

Most research has found that modest increases to the minimum wage have minimal impact on employment. A 2017 study, which looked at the minimum wage increases in Seattle—the first major US city to raise its minimum wage to $15—found that an initial increase to $11 seemed not to have much of an impact on employment. But the second rise a year later, to $13, led to a sharp decline in both jobs and hours worked.

Penn State assistant professor of public policy Hilary Wething, who was part of the team of researchers who found evidence of the employment losses in Seattle, notes that the proposed national legislation is much “less aggressive” than the schedule in Seattle’s policy, which would give businesses more time to acclimate to a federal mandate.

Editor’s note: An earlier version of this article suggested that a minimum wage increase could land on the ballot in Delaware and Rhode Island in 2022. In those states, any increase would come through legislation—which the NELP expects to see in 2021.

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