The United States’ lowest-paid workers are seeing their paychecks rise at the fastest pace in more than a decade.
Slow wage growth has plagued the economy ever since jobs started coming back after the Great Recession. But that has been changing, with wages rising at all levels and especially for those at the bottom.
The Trump White House and Washington policymakers have touted the tight labor market as the main engine driving gains for the working class, but a Washington Post analysis of Labor Department data suggests that paychecks also grew because of a nationwide movement of rising minimum wages in various states and cities over the past couple of years.
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“This suggests that the minimum wage has been a factor, though not the primary factor, behind wage growth at the lower end,” said economist Jeffrey Clemens of the University of California at San Diego, who has been more skeptical of the benefits of a higher minimum wage than some of his peers.
By contrast, wages for most workers do not reflect the same pattern. The other 75 percent of the workforce didn’t see pay hikes to the same degree, even in states where minimum wage increased. That reinforces the idea that rising minimum wages are the main reason that low-wage workers are doing better, as opposed to other forces.
“There are some very strong signals that minimum wages are in fact actually raising wages more for people at the bottom than you would expect just on tightening labor markets,” said the Economic Policy Institute’s Ben Zipperer, whose research on the effects of minimum wages has been widely cited.
And these paycheck pops for the poor are not happening only in urban, coastal enclaves. Consider Arkansas, where last year voters approved a plan to steadily hike the state minimum wage until it hits $11 an hour in 2021. Over the past three months, the state’s workers have seen the fastest wage growth of any state in the union.
And the move was popular. In 2018, the
Arkansas ballot initiative to raise the minimum wage won 68 percent of the vote in an election where Republicans swept all the other key races.
The wage hike was controversial, as Arkansas business owners worried about the labor costs associated with paying employees more and warned of job losses.
But that didn’t happen. In November, the Arkansas unemployment rate was 3.6 percent, down from 3.7 percent a year earlier.
