The new mandatory minimum wage laws that will come into effect in 12 states and in the District of Columbia in 2018 will have disastrous effects on job growth and the longevity of small businesses, according to a new study provided exclusively to The Daily Caller News Foundation

New minimum wage laws have an impact on job growth

The study, conducted by the free market advocacy group American Action Forum, revealed that the minimum wage increases implemented in 2018 alone will cost the nation about 261,000 jobs. Once the minimum wage increases have been fully introduced, they should cost about 1.7 million jobs, using the official employment projections of each state as a reference. This figure is significant in light of the Bureau of Labor Statistics 2017 projections that the entire US economy will add 11.5 million jobs over the next decade.

The predictions are based on a peer-reviewed 2015 study in the Journal of Human Resources which found that a 10 percent increase in the real minimum wage is associated with a decline 0.3 to 0.5 percentage points. net annual growth rate of employment. The study also showed that minimum wage increases lead to a reduction in employment levels: three years after a minimum wage increase of 10%, employment is on average 0.7% lower to what it would have been if the minimum wage had not increased.

Based on these findings, AAF researchers predict that New York’s minimum wage increases (18.2% in New York, 10% in surrounding counties and 7.2% in the rest of the state) will cost the Empire 98,000 jobs in 2018 The impact of the policy will be almost as destructive in California, where the increase in the minimum wage of 4.8% is expected to reduce the employment growth of 63,000 positions. Due mainly to the size of their respective economies, both states are expected to account for 75% of impending job losses.

The remaining 10 states and the District of Columbia, some of which have phased in minimum wage increases on January 1 and others who will apply the increases on July 1, are expected to lose between 1,000 jobs, in the case of Vermont, and 21,000 in the case of Colorado.

The study of Meer and West 2015 on which the AAF researchers’ support is not flawless, she was criticized for her inability to take into account the differences between employment sectors, says Arindrajit Dube, associate professor of economics at Umass Amherst.

“The negative association between growth in employment and minimum wage is in the wrong place: it is manifest in a manufacturing sector with few workers at the minimum wage, but which is absent in Low salaries like catering and distribution.In other words, it’s probably a statistical artefact, not a causal one, “wrote Dube about the Study


Democrats have increasingly adopted a national minimum wage of $ 15, pushing the concept forward in their “A Better Deal” economic platform despite worrying results in cities like Seattle and San Francisco, which are currently earning minimum of $ 15. by additional annual increases.

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