2024 Ballot Measures: California, Alaska Minimum Wage Hikes Would Drive Up Costs & Hurt Small Business

Originally posted by the Americans for Tax Reforms on October 10, 2024: https://www.atr.org/2024-ballot-measures-california-alaska-minimum-wage-hikes-would-drive-up-costs-hurt-small-business/

Ballot questions to raise the minimum wage remain a threat to jobs and businesses in the states.  

This year, California and Alaska have ballot measures up for a vote that would raise their minimum wage mandates. These measures and more are covered in ATR’s 2024 State Ballot Measure Guide. 

Raising the minimum wage will have catastrophic repercussions for America’s lowest earners. Many small businesses, and several larger businesses, run razon thin margins to be profitable. Restaurants for example operate at a 3% profit margin, and those employees will be the most affected by this change.

If the minimum wage is increased there will be less funds to pay employees, and layoffs will follow. One study from the Southern Economic Journal, noted they “estimate that nearly 1.3 million jobs will be lost if the federal minimum wage is increased to $9.50 per hour, including 168,000 jobs currently held by the working poor.”  

This change also disproportionally hurts the population it is trying to help. A study from Harvard Business Review, after looking at a recent California minimum wage increase “that the total wage compensation of an average minimum wage worker in a California store actually fell by 13.6%.” This is because while they earned a higher wage, employers had to schedule them for fewer hours to avoid layoffs. Even when a company can avoid layoffs, the lowest level employees are still making less than they were before the minimum wage increase.  

A minimum wage increase does not only hurt the lowest of earners, but all people will feel the effects at the supermarket and other stores. One study from the Cato Institute highlighted “a comprehensive review of more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent.”  

Voters should be wary of ballot measures pushing to raise the minimum wage.  

Authored by Joey Webb

To learn more about the Ballot Measure visit https://www.votenoon1ak.com/