A minimum wage hike could mean smaller paychecks

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On paper, a minimum wage increase may sound like a relief for workers, but it could actually mean smaller paychecks and cuts in benefits such as healthcare and retirement plans.

Income and benefit cuts hurt women, people of color, and young people, who are most likely to be working minimum wage and retail jobs — the exact people liberals claim to be caring for when pushing minimum wage hikes nationwide.

A new study by professors from the Georgia Institute of Technology, Cornell University, and the University of Washington found that when a retail chain in California raised its minimum wage, it hired more people but gave fewer hours per person. In essence, people who already had jobs saw their hours cut, making them less likely to be eligible for benefits, and experienced reduced “consistency of weekly and daily schedules.”

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The researchers reported that as the minimum wage increased by $1, “the number of workers scheduled to work per week increases by 27.7%, and the hours assigned to each worker decrease by 20.8%.” The researchers reported that, in California, the number of average hours per worker per week fell from 24 to 19 hours. As a result, the average Californian minimum-wage worker saw a wage compensation drop of 13.6% in spite of the wage increase.


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