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Calls for wage increases-at the federal, state, and local levels-are based on the premise that increases in the minimum wage will probably improve the economic well-being of workers. One area of attention in the discussion is whether a minimum wage increase could actually impact many workers. Many skeptics have argued that only a very modest share of workers actually get the minimum wage, and furthermore, that many of these workers are not fighting adults, however, rather teenagers from wealthy families.

Understanding the magnitude of the impact of a federal or minimal wage increase on workers is a significant first step in informing the policy discussion.

The argument that only a small share of workers has been actually paid the minimum wage misses a vital point: lots of people who would be impacted by a raise in the minimum wage are still in reality workers making over the minimum wage. In this month's Hamilton Project economic evaluation, we consider the probable magnitude of the effects of a minimum wage increase on the number and share of workers changed. Although comparatively few workers report salary equal to the minimum wage, a larger share of workers in the United States earns salary near the minimum wage. This is true from the countries that comply with the federal minimum wage, in addition to all those countries that have instituted their own higher minimum wage levels.

An increase in the minimum wage tends to have a "Ripple effect" on other workers earning salary near that threshold. This ripple effect happens when a raise in the minimum increases the wage received by workers earning marginally over the minimum wage. Based on this recognition, we now quantify the number of workers potentially affected by minimum wage policy utilizing the assumption that workers earning up to 150 percent of the minimum could see a wage increase from a minimum wage that is higher. We hasten to note that a comprehensive evaluation of the internet impacts of a minimum wage increase would also need to account for potential employment outcomes.

Only 2.6 percentage of workers are compensated exactly the minimal wage, but 29.4 percentage of workers will be paid wages that are below or equal to 150 percent of the minimum wage within their state. In these nations adhering to the federal floor, 3.7 million workers earn the minimum wage or not. 18.9 million workers in these nations would probably benefit from an increase in the federal minimum wage. In these nations, 3.9 million workers earn their nation's minimum wage along with an additional 12.1 million workers earn between the diatomaceous ground, but less than 150 percent of the minimal level.

In general, up to 16.0 million workers would probably see a rise in their salary if the minimum wage had been increased in these nations. Every in the country has a significant share of workers who'd be impacted by an increase in the minimum wage at that state, as seen in figure 1 below. In the high-population condition of California, 4.6 million workers would probably see a wage increase if the minimum wage had been raised in that state. Not surprisingly, the eighteen states with a higher wage level than the federal benchmark tended to have higher shares of workers salary within 150 percent of the minimum wage.

In every in the country, at least one in six workers had wages that were equal to 150 percent of the minimum wage or less. The minimum wage debate underway tends to narrowly focus on these workers making the minimal wage. This approach misses a number of workers whose wages would be raised via a ripple effect resulting from an increase in the minimum wage. As our economy continues to recover, a minimum wage increase will provide a boost to the earnings of school-age workers. A significant 35 million workers from throughout the country could see their wages increase if the minimum wage had been increased, allowing them to earn a better livelihood and also lead more economically stable lives.

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If policy makers and voters really understood the fundamentals of economics, they might find themselves on the other side of the now-popular debate to increase the minimum wage. Liberals use a raft of studies and a few arguments to back up their minimum-wage-raising position, touting them as proof that hiking the minimum wage helps both workers and the broader economy. This Huffington Post article cites a study projecting that the economy would grow by $22 billion and make 85, 000 new jobs, all......Read More

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