Issues 2016: 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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Oren Cass is a senior fellow at the Manhattan Institute. Follow him on Twitter here.

Photo by Otto Yamamoto / Flickr