A recent study found that California’s plan to increase the minimum wage to $15 could cost the state as much as 400,000 jobs.
The Employment Policies Institute study analyzed employment trends between 1990 and 2017, finding that the minimum wage increase could cost the state 400,000 jobs.
“The job loss is not spread evenly. Slightly more than one-half of the job loss is projected to be in two industries: accommodation and food services, and retail trade,” the report states.
The study also found that for every 10% minimum wage increase passed, employment declined 2%. This will have the greatest impact on low-income workers, who could see a 5% job cut.
The jobs lost account for roughly 4.1% of California’s state employment in the 31 counties that participated in the study.
Democratic Governor Jerry Brown signed the $15 minimum wage legislation in April 2016 and it will increase the minimum wage to $15 by 2022.
Under the law, the minimum wage would increase to $11 per hour from $10.50 per hour by January 1, 2018, for businesses employing 26 or more people. After 2018, the minimum wage would increase $1 per year until it reaches $15 per hour in 2022.
By 2023, the law will go into effect for businesses with 25 total employees or less.
As a result of the Democrats and Gov. Brown, many people are already beginning to see their jobs being replaced.
A little more than a week after signing the minimum wage bill into law, the clothing company American Apparel fired 500 workers and announced that manufacturing of more complex pieces of clothing could be outsourced to third-party contractors.