Do minimum wage increases hurt wages of above minimum-wage workers?


I know if the minimum wage is increased to $15/hr consumer prices will increase. Will those with higher paying jobs see a decrease in their salary if the minimum wage is increased to $15 /hr nationwide?


In theory, a stiff and swift increase in the minimum wage may result in less employment (of minimum-wage-eligible workers) and may increase prices to some extent as firms pass on higher wage costs to their consumers. But it does not follow that higher-wage workers will see a decrease in their wages. Since the wages of the minimum wage-eligible workers have gone up, they may increase their spending and boost demand (and sales) which may even allow firms to raise salaries of higher paid workers. 

Last updated on
May 27, 2019

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