Home / Blog / Article


December 18 2017

California’s $15 Minimum Wage to Cost 400,000 Jobs – Many for Women

by Patrice Lee Onwuka

California wants to be a leader among states, but this is nothing to follow. The state’s march to a $15 per hour minimum wage will cost almost 400,000 low-wage jobs - jobs occupied by women and vulnerable workers.

In two weeks, on January 1st, California’s minimum wage will float up to $11.00 an hour (from $10.50) for companies with over 25 employees and to $10.50 (from $10) for companies with 25 or fewer employees. The minimum wage will continue to rise every year until 2022 when large companies will be forced to pay $15 an hour. By 2023, employers of all sizes will face a $15 minimum wage. Some cities and municipalities will hit $15 an hour even sooner.

The Employment Policies Institute has new analysis that should give lawmakers pause. It finds that raising the minimum wage to $15 in 2022 will lead to massive low-wage job losses.

Here are a few key findings:

  • 398,228 jobs – the projected number of jobs that will be lost
  • 4.1 percent – the reduction in employment
  • Job losses will be concentrated in two industries: agriculture, forestry, and fishing; and accommodation and food services (industries with the largest shares of low-wage workers)
  • 11 percent – the percentage of jobs lost in agriculture, forestry, and fishing
  • 10 percent – the percentage of jobs lost in accommodation and food services
  • Nearly half of the observed job loss will occur in foodservice (123,000) and retail industries (77,000) – industries that heavily employ women

When Governor Jerry Brown signed this minimum wage increase into law in 2016, he had reservations about the impact, but caved to pressure from advocates.

At the time he admitted that “Economically, minimum wages may not make sense,” but that it’s more than an economic issue, it's a moral one. The Senate President Pro Tem Kevin de Leon took a more definitive view saying, “No one who works full time should live in poverty.”

We want parents to take care of their kids. We want workers, especially women living paycheck to paycheck, to earn more. However, this provides fresh evidence that the $15 minimum wage harms low-wage workers even if it helps in the short-term. 

While lawmakers and advocates for the higher minimum wage focus on the short-term benefits of a bigger paycheck to workers, they ignore the costs of lower pay overall and job losses as well as higher prices for consumers, which outweigh benefits. For example, Seattle’s minimum wage hike left low-wage workers with $125 less per month while San Francisco’s minimum wage increase triggered restaurant closures.

Proponents also ignore the rise of automation. Economists at the London School of Economics and University of California, Irvine analyzed Census data from 1980 to 2015 and found that for lower-skilled workers, higher minimum wages encourage employers to automate.

If we want to grow paychecks for workers, we should cut taxes to allow employees to keep more of what they earn and cut tax for employers who can reinvest those savings into their workers’ salaries. Minimum wage increases are a false promise of help that end up eroding opportunity for those who need it most.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
Follow us