Washington, D.C. — July 24 marks 14 years since the last increase in the federal minimum wage. A new Center for American Progress column reveals that states with minimum wages set higher than the federal minimum wage experienced faster jobs recovery in their leisure and hospitality industry since January 2021 when compared with states maintaining the federal level.
The leisure and hospitality industry employs the highest percentage of hourly workers at or below federal minimum wage, with nearly two-thirds of all such workers employed in the industry in 2021. From January 2021 to May 2023, states with minimum wages above the federal minimum saw a 38 percent industrywide job growth, almost double that of states using the federal minimum wage, which saw only 19 percent growth. Additionally, states without a tipped minimum wage have seen faster recoveries, with 53 percent job growth in the leisure and hospitality industry, while those with tipped minimum wage only saw about 19 percent growth. This new analysis adds to existing evidence indicating that raising wages can do much more than boost wages for directly affected workers. This analysis also walks through how minimum wages higher than the federal minimum wage can also help employers attract and retain workers, boosting economic growth and economic security for workers.
“Guaranteeing workers a higher minimum wage and eliminating the tipped minimum wage are important to achieving an equitable and growing economy,” said Jessica Vela, research associate for Inclusive Economy at CAP and author of the column. “Federal action is 14 years overdue, but in the meantime, states must take steps to raise the minimum wage and eliminate the tipped minimum wage to benefit their workers, employers, and the economy.”
Read the article: “Higher State-Level Minimum Wages Aid in Faster Jobs Recovery” by Jessica Vela
For more information on this topic or to speak with an expert, please contact Sarah Nadeau at snadeau@americanprogress.org.