Effect of Mandated Minimum Wage on US Jobs

March 30, 2011

Free Market Foundation

In 2006, the last full year in which the U.S. federal minimum wage was a constant value throughout the whole year (at least before 2010) approximately 6,595,383 individuals in the United States earned $7.25 per hour or less. For 2010, the first full year in which the U.S. federal minimum wage was a constant value through the year since 2006, the U.S. Bureau of Labour Statistics estimates that an average of just 4,361,000 individuals in the United States earned the same equivalent of the current prevailing federal minimum wage of $7.25 or less throughout the year, says Political Calculations.

In terms of jobs lost, that means that 2,234,383 of the jobs lost in the U.S. economy since 2006 have been jobs that were directly impacted by the series of minimum wage increases that were mandated by the federal government in 2007, 2008 and 2009.

Interestingly, the average number of employed members of the civilian labour force in 2006 was 144,427,000.

In 2010, the average number of employed members of the civilian labour force in the United States was 5,363,000 less, standing at 139,064,000.

So, in percentage terms of the change in total employment level from 2006 to 2010, jobs affected by the federal minimum wage hikes of 2007, 2008 and 2009 account for 41.8 percent of the total reduction in jobs seen since 2006, says Political Calculations.

Source: The Minimum Wage and Job Loss from 2006 through 2010, Political Calculation, March 9, 2011.

For text: http://politicalcalculations.blogspot.com/2011/03/minimum-wage-and-job-loss-from-2006.html

For more on Economic Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=17

First published by the National Center for Policy Analysis, United States

FMF Policy Bulletin/ 22 March 2011