by Ben Gitis
American Action Forum
July 09, 2014
The decision of numerous states to raise their minimum wage has been detrimental to job creation in industries that actually hire minimum wage workers: retailers and restaurants. At the beginning of 2014, 13 states enacted minimum wage hikes. Halfway through the year, these states have seen the net job growth rate among their retail and restaurant workers fall an average 1.7 percentage points, costing the states 129,200 new jobs total. The money needed to afford an increase in the minimum wage has to come from somewhere. While many assume that it would come out of profits of large companies, in reality it only affects restaurants and retail businesses that have narrow profit margins. They must either reduce their current employment levels or put off plans to expand. As a result, the cost of the minimum wage comes out of the pockets of unemployed workers who are denied an opportunity to work.



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