Friday, 08 February 2019 20:46

Minimum Wage

A study by Washington University on minimum wage was very enlightening.  From an employer’s perspective, each $1/hour increase in minimum wage costs the employer approximately $2,600/year per employee.  So if New Mexico’s statewide minimum wage increases from $7.50 to $10, it will cost employers $6,500/year per employee in those brackets.   

The Washington University study showed that in the state of Washington, a minimum wage increase from $9.47 to as much as $13 per hour raised earnings by an average of $8-$12 per week. The entirety of these gains accrued to workers with above-median experience at baseline; less-experienced workers saw no significant change to weekly pay.  Approximately one-quarter of the earnings gains can be attributed to experienced workers making up for lost hours in Seattle with work outside the city limits. We associate the minimum wage ordinance with an 8% reduction in job turnover rates as well as a significant reduction in the rate of new entries into the workforce.

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