Minnesota’s minimum wage hikes have led to slower job growth in the restaurant industry and significant job losses among younger workers, a new study has found.
Noah Williams, professor of Economics and director of the Center for Research on the Wisconsin Economics at the University of Wisconsin, compared jobs and economic data in Minnesota and Wisconsin since Minnesota began increasing its minimum wage in 2014.
Wisconsin last raised its minimum wage in 2010 to keep pace with the federal minimum wage of $7.25 an hour. Minnesota’s began a series of minimum wage increases in 2014. It has increased from $6 per hour to $9.65 as of this January.
Those minimum wage hikes have led to slower job growth as compared to neighboring Wisconsin, particularly in the restaurant industry and among younger workers, Williams research found.
All else being equal, “businesses will demand less labor, which could mean fewer workers and/or shorter hours per worker,” Williams said. “There were workers willing to work for wages that were less than the new, higher minimum wage and businesses that were willing to hire them for that … The distortion is that the minimum wage rules out mutually beneficial agreements between workers and firms.”