Statement from Employment Policies Institute on EcPI Minimum Wage “Study”

  • Publication Date: May 2009

  • Topics: Minimum Wage

WASHINGTON, DC – Today the Employment Policies Institute (EPI) released the following statement in response to a “study” released yesterday by the Economic Policy Institute (EcPI):

“The Economic Policy Institute’s idea that higher minimum wages have provided a ‘stealth stimulus’ is ludicrous. Government mandated wage rates have more precisely been an ‘unemployment stimulus,’” said Kristen Lopez Eastlick, Senior Research Analyst.

“University research overwhelmingly runs counter to the claims of EcPI. In fact, the federal minimum wage hike has priced employees out of the workforce, and based on recent data from the Bureau of Labor Statistics, it’s the low and unskilled workforce—especially minority teens—who are getting hit the hardest.“

University-based research predicted an increase in job losses for vulnerable groups as a result of the 2007 Federal Minimum Wage legislation. When looking at job loss during a good economy, research from the University of California found that negative effects of wage hikes are overwhelmingly concentrated on the most vulnerable employees, particularly young minorities and high school dropouts.

2008 research from American University and Cornell University shows that the majority of benefits of the 2007 wage hike went to families not living in poverty. Various studies continue to affirm that increases in the minimum wage are poorly targeted to benefit low-wage families, as Census Bureau data shows average family income of minimum wage employees is nearly $45,000 a year.