Research Shows Higher Minimum Wages Have Not Cost Chicago Or Illinois Jobs
As legislators in Springfield debate a proposal to gradually raise Illinois’ minimum wage up to $15 an hour by 2022, opposing voices have argued that lifting the state’s wage floor would cost jobs. But a new analysis of major minimum wage increases in communities across America – including the state’s largest city of Chicago – provides further evidence that raising wages is a net benefit for working people.
Our research team recently completed the first study of the impact of Chicago’s minimum wage – now at $10.50 and eventually increasing to $13 by 2019 – and of the group of other U.S. cities, including Seattle, San Francisco and Oakland California, that currently have the highest minimum wages in the U.S. We compared job growth in Chicago and these cities with job growth in other economically comparable regions of the U.S., and found that higher minimum wages boosted worker pay without leading to any discernible loss of jobs or slowing of job growth to date.
Those findings are in line with the lion’s share of studies of past minimum wage increases in the U.S., which have found that any negative effects on employment have been very small. For example, our research team compared job growth in every pair of neighboring U.S. counties that have varying minimum wages – including every Illinois county bordering a neighboring state where the minimum wage is lower. That analysis similarly shows that the counties with higher minimum wages have not seen any discernible loss of jobs or slowed job growth.
Economic theory helps explain these results. It suggests that higher minimum wages can have both positive and negative effects on employment. Higher payroll costs will lead employers to automate some of their work and to raise prices slightly, which reduces sales and […]