Public Assets Institute “The vast majority of the most rigorous modern research on the impact of higher minimum wages—including robust increases to $13 or more—shows that these policies boost worker earnings with little to no adverse impact on employment.” Testimony to the Minimum Wage Study Committee from Yannet Lathrop of the National Employment Law Project on November 21, 2017. In other words, there is no credible evidence that minimum wage increases cause significant job loss.
The final report released by the committee last month deferred to the Legislature’s standing committees on the critical question of when a $15/hour minimum wage should take effect because of a number of unresolved issues, including the concern about job loss. The report discusses in detail the anticipated job losses for various scenarios.
Even in the most aggressive scenario of a $15 minimum wage taking effect by 2022, the estimated job loss noted in the report is small—less than one percent of total jobs and a fraction of the typical annual job market churn in Vermont. In any given year, there are jobs added and jobs lost. Public Assets’ November jobs brief shows that Vermont added about 22,000 jobs and lost about 21,000 between March 2016 and March 2017. This annual churn is a small part of the more than 300,000 total jobs that don’t change in Vermont.
And keep in mind that lost jobs don’t equate to unemployed workers. Vermont’s unemployment rate has been lower than that of the U.S. for over a decade, hovering around 3 percent throughout 2017. That means people who lose their jobs are likely to find new ones, and those new jobs are going to pay more.
Increasing the minimum wage will put an additional $240 million in the pockets of Vermont workers, who will spend it in the Vermont economy. We shouldn’t let misplaced concerns about possible small job losses derail that progress.