$15 minimum wage to cost California 400K jobs: Study

California reached a deal on legislation to raise the state minimum wage across all businesses to $15 per hour by 2023, a move that could cost the state hundreds of thousands of jobs, according to a new report.

A study conducted by the Employment Policies Institute (EPI), which analyzed employment trends from 1990 through 2017, found that each 10% increase in the minimum wage in the Golden State has resulted in a corresponding 2% decline in employment for affected employees. The impact was larger, 5%, for lower-paid workers. By those estimates, the EPI projects that the pending $15 minimum wage hike would cost California 400,000 private sector jobs, with heavy losses in both the foodservice and retail sectors.

While the EPI acknowledges that real firms could respond to higher minimum wages in ways that cause divergent effects," it says what is not in dispute? is that rising minimum wage has depressed employment opportunities in the most heavily-impacted industries."

As of January 1, California's minimum wage will increase to $11 per hour from the current level of $10.50 per hour for businesses with 26 employees or more. From that point, it will be a $1 per year increase trajectory through 2022. Businesses with 25 employees or less will reach the $15 per hour threshold by 2023.

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