What Research Says About the $15 Minimum Wage and Crime

How does raising the minimum wage affect crime rates? Next City looks at the research.

(Photo by Jake Blumgart)

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While individual cities from Seattle to Minneapolis have taken the lead in gradually raising their local minimum wages to $15 an hour, the federal minimum wage at $7.25 an hour has not been raised in over 10 years. The Raise the Wage Act of 2021 introduced a phased plan to raise the federal minimum wage to $15 by 2020 which, according to the Economic Policy Institute, would raise the earnings of 21% of the U.S. workforce — roughly 32 million workers and mostly Black and Hispanic women.

Proponents say that the increase is long overdue, essential for addressing everything from the affordable housing crisis to income inequity. The EPI estimates that, should the act pass, earnings would rise for roughly one in three Black workers and one in four Hispanic workers compared to one in five white workers. Further, in the wake of the pandemic, the EPI estimates that nine out of every 10 workers who would receive pay increases under a $15 federal minimum wage would be those who can’t work from home — overwhelmingly Black, Latinx, and Native American workers.

Business-centric Republicans and those aligned with them have trotted out their predictable, party-line responses to the bill: that it would harm business (small businesses in particular), force companies to turn to job cuts, and have overall negative impacts on the economy. Some have said that raising the minimum wage would increase crime or, as one Florida state senator has argued, disproportionately harm people with criminal records. But what does the research actually say?

One study funded by the Employment Policies Institute (founded in 1991 by Richard Berman, a public-relations professional and lobbyist) claims that, thanks to job loss spurred by a minimum wage increase, “excessive idleness” or a desire “to replace their lost income” would make some neighborhoods less safe through an increase in property crime by 16 to 24 year-olds.

But Ken Jacobs, chair of UC Berkeley’s Labor Center, takes issue with calling the Employment Policies Institute’s work “research” in the first place. “It’s a PR firm,” Jacobs says. “They’re a corporate-funded firm that specializes in ‘research’ to try to disprove global warming and say pollution isn’t bad.” He adds that “they put out ‘research’ that is designed to muddy the waters, confuse issues, or prove the corporate position.”

On the institute’s recent work on the minimum wage and crime, “it’s clear in the paper, if you look into their charts in the cities where they claim to see an increase in crime, they show a pre-trend before the implementation of a new minimum wage,” he says. “If you’re going to see something as a result of a wage increase… you should see a break or change at the point of the policy intervention.” Ultimately Jacobs describes the study as fatally flawed research that doesn’t find what it reports to find.

Jacbos says that, while there are only a few studies that look directly at minimum wage, “the other way to get at this is looking at the environments around local labor markets and measures that impact workers’ earnings or income.” To understand the relationship between crime and the minimum wage, he points to other research like a 2018 paper that looked at the impact of minimum wage increases and Earned Income Tax Credits (EITCs) on recidivism rates. The authors found that an average minimum wage increase of $0.50 reduces the probability of both men and women returning to prison within one year by 2.8 percent.

Another paper from 2002 endeavored to look at the impact of both wages and unemployment on crime (rather than unemployment rates alone) and found that wages play a larger role in crime trends than unemployment. Notably the authors found that, between 1979 and 1995, “wage declines of unskilled men have contributed to a 13.5% increase in burglary, 7.1% increase in larceny, 9.2% increase in aggravated assault, and an 18% increase in robbery.”

“That’s pretty compelling evidence that improving wages can be expected to reduce crime rates,” Jacobs says.

However, raising the federal minimum wage from $7.25 an hour to $15 an hour by 2025 would represent an increase that’s larger than ever before.

Aaron Chalfin — an assistant professor at the University of Pennsylvania’s Department of Criminology who has studied Seattle’s $15 minimum wage increase in particular — cautions that “the bottom line is that no one knows what the effect of a $15 national minimum wage would be.” We can try to extrapolate learnings from major coastal cities that have increased their minimum wage, he says, but what that would mean in places like rural Georgia has yet to be seen.

He cautions that the minimum wage in Seattle was already $9 in 2014 and has been steadily rising to the $15 an hour it reached in 2017, but notes that his work has not found a difference in the levels of property or violent crime as a result. “It also doesn’t seem to have changed employment levels very much,” he says, but adds that Seattle is “a wealthy city that some people might say could afford to absorb that change.”

Looking forward, Chalfin sees value in studying cities like Minneapolis, which set its minimum wage to be scaled to $15 an hour by 2022 for large businesses while giving small businesses until 2024 to match. “Minneapolis isn’t as wealthy as San Francisco or Seattle or New York City, so that could be a reasonable case study,” he says. Ultimately, though, “we have to wait for a relatively poor place to take the plunge,” in order to get a better understanding of the ripple effects of minimum wage increases on crime in various locations.

Chalfin also sees potential in state-level increases as a solution for dealing with demographic and geographic disparities across the U.S., citing Illinois’s increase to $15 an hour by 2025. “In Illinois, you have wealthy areas in and around Chicago but you also have rural areas in the southern part of the state. It feels like they’re in different labor markets — people aren’t commuting from Chicago to Carbondale. I think it will be really important to figure out the impacts in wealthy versus not wealthy areas.”

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Cinnamon Janzer is a freelance journalist based in Minneapolis. Her work has appeared in National Geographic, U.S. News & World Report, Rewire.news, and more. She holds an MA in Social Design, with a specialization in intervention design, from the Maryland Institute College of Art and a BA in Cultural Anthropology and Fine Art from the University of Minnesota, Twin Cities.

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