5 Myths About Minimum Wage, Debunked

Across the United States, the cost of living is rising, while wages are stagnating. As the fight over the minimum wage in legislatures is becoming more prominent, it is important to combat myths that overtake the conversation surrounding the minimum wage.

Myth 1: "A higher minimum wage only benefits younger workers."

According to a report from Keystone Research Center, 90% of workers who would benefit from a $12 minimum wage in Pennsylvania were age 20 or older; many had some college education and worked full-time. Adults comprise the majority of low-wage earners, with women and family providers forming a large share. In short, raising the minimum wage directly impacts working adults and families, not just high-school students. Providing a minimum wage is necessary for the backbone of America's workforce.

Myth 2: "Raising the minimum wage will drive large price increases across all goods and services."

While raising wages may increase some costs for businesses slightly, the actual pass-through to consumer prices is remarkably small. Keystone Research Center reports that a 25% minimum-wage increase resulted in only a 1.45% rise in restaurant prices. Overall, the gains from reduced turnover, higher morale, and improved productivity can offset much of the cost. Modest wage adjustments are not proven to cause inflation; instead, they bring manageable changes while building stronger, more stable, and more livable local economies.

Myth 3: "Workers earning just above the minimum wage will be harmed when the wage rises."

Higher floors lift wages across nearby brackets as employers raise pay to retain experienced workers, meaning that people overall are benefiting. In Pennsylvania, when wages rose to $15, over 560,000 Pennsylvanians earning slightly more than that also benefited from upward adjustments. Raising the floor for minimum wage exerts upward pressure throughout the low-wage spectrum, including those just above minimum wage.

Myth 4: "Small businesses will be destroyed by a higher minimum wage."

In reality, the opposite is true. Uniform living wage standards actually level the playing field, preventing larger corporations from undercutting smaller competitors through wage suppression. Moreover, higher pay reduces turnover, saving small businesses thousands in rehiring and training costs. As an added benefit, increased consumer purchasing power flows directly back into local shops and services, driving the growth of these businesses.

Myth 5: "Raising the minimum wage will cause significant job losses."

Research shows that wage hikes ensure that workers have basic living standards while reducing turnover. Overall, a review of 64 empirical studies found no consistent evidence that higher minimum wages cause job losses, because the jobs are set into the ecosystem. Rather than destroying jobs, higher wages stabilize employment and benefit both employees and employers over time through overall economic growth.

— Omar Dahabra