New Evidence Shows That Raising Wages Leads To ... Higher Wages

Job Vacancy FACT SHEET—April 2016In Minnesota we have 98,000 unemployed job seekers competing for 96,000 job openings, according to the updated Job Vacancy Survey from the Minnesota Department of Employment and Economic Development (DEED).  It’s the first time we’ve seen a 1-to-1 ratio between job seekers and job openings since the state first conducted the survey in 2001.  As recently as two years ago, we still had two job seekers for every job opening. *In the last two years we’ve raised the state minimum wage from $7.25 to $9.00 per hour.  Not surprisingly, the increase led to higher median wages in low-wage occupations.  In sales and in personal care and service, median wages rose by about $1.20; in janitorial and in food preparation and serving, they rose by about $2.00. **Throughout the minimum wage debate the business community predicted higher wages would reduce opportunities for workers.  Industry lobbyists often claimed the increase “would hurt the very people it’s designed to help. ”  Despite these dire and persistent warnings, the number of low-wage job openings rose dramatically over the last two years:• Personal care and service rose from 3,700 to 6,000 openings, an increase of 60 percent.• Food preparation and serving rose from 5,300 to 11,700 openings, an increase of 120 percent.• Janitorial rose from 1,200 to 3,000 openings, an increase of 150 percent.• Sales rose from 5,600 to 14,500 openings, an increase of 160 percent.The survey provides no evidence of a shift to high-skill occupations:• Only 36 percent of all openings require education or training beyond high school—the lowest share for any fourth quarter in 14 years.  • Only 19 percent of all openings require a four-year degree.The median wage for all job openings is $13.55 per hour.  According to DEED’s new Cost of Living in Minnesota research, the statewide average for a family-supporting wage is $17.55 per hour. *** To see the updated research by county, use DEED’s Cost of Living Calculator at /data-tools/col/index.jsp
Questions?  Contact Kevin Ristau at 651-290-0240 or * Figures for job seekers and job openings are from fourth quarter 2015.** A median is a midway point; half of the jobs are above it, half below. *** The average Minnesota family size is three persons; the average workweek is 33.7 hours.  Partnered, 1 full-time and 1 part-time worker, 1 child, provides a standard yearly cost and hourly wage need for a typical family, regardless of how the weekly work hours are distributed between the two adults.