labor

Is a $15 Federal Minimum Wage Appropriate?

The size and diversity of the U.S. labor market make a national lens inappropriate for evaluating minimum-wage policy. A dramatic increase in the federal minimum wage—to $15 or even $12 per hour—would replace a system that tailors policy to local conditions with a system that imposes a single standard from America’s most prosperous cities on less affluent areas that can ill afford it.

The ratio of the minimum wage to the median wage in the U.S.—based on the controlling federal, state, and local minimums—is 0.47: this ratio aligns closely with the standard 0.5 benchmark and places the U.S. above the 0.46 average for comparable advanced, market-based economies.

The 13 states with the highest median wage all have a minimum wage at least one dollar above the federal minimum.

Relative to their median wages, imposing a minimum wage of $15 per hour in places like El Paso and Myrtle Beach—where the median wage level is less than $13 per hour—would be the equivalent of imposing a minimum wage of $30 per hour in Washington, D.C., or Silicon Valley.

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