State Minimum Wage

State minimum wages are legislative mandates setting a floor for the hourly wage that employers must pay their workers. The United States has had a federal minimum wage since the Fair Labor Standards Act (FLSA) was passed in 1938, and the federal floor currently stands at $7.25 (with exceptions for tipped workers, teenagers early in their employment, and some workers with disabilities).^44,87 The federal minimum wage has not increased since 2009, but recent bills have proposed phasing in an increase to $15.00 by 2025.^2,3 States can legislate their own higher minimum wages, and as of October 1, 2021, 31 states have adopted and implemented minimum wages higher than $7.25.⁸⁶ A minimum wage is a policy lever states can use to ensure a basic standard of economic wellbeing for all workers and prevent exploitation by employers, but raising state minimum wages may have the greatest effect on reducing poverty and improving the standard of living for the lowest-wage workers and their families.

A “living wage” is a distinct, more subjective concept that represents the minimum adequate wage that an organization or group (such as a labor union) believes is necessary to meet basic needs and provide a decent standard of living for workers. More than 140 local governments have adopted living wage ordinances since the 1990s, but they tend to cover a smaller, more specific share of workers than state or local minimum wages do, often applying to workers with jobs connected to the public sector, either directly or through contracts.^iii,68 This review focuses on state and local minimum wages rather than examining the impact of living wage ordinances, but the policies are related.

In addition to setting the level of the standard and tipped state minimum wages^iv at or above the federal levels, states can also legislate a number of other policies related to wages that apply to specific subgroups and businesses.

Who Is Affected by State Minimum Wages?

According to the US Bureau of Labor Statistics, 1.1 million workers earned at or below the federal minimum wage of $7.25 in 2020 (representing 1.5% of hourly workers).⁵ This proportion varied considerably by state—in South Carolina, approximately 4 percent of hourly workers earned the federal minimum wage or less in 2020, and 3 percent of workers did in Alabama, Louisiana, Mississippi, and Virginia, compared to less than 1 percent of workers in states such as California, Minnesota, Montana, Oregon, and Washington.⁵ Part-time hourly workers are more likely than full-time hourly workers to be paid the minimum wage or less (approximately 4% compared to 1%).⁵

With a $7.25 hourly wage and a 40-hour work week, a full-time minimum wage worker earns just $15,080 each year, which is below the poverty level for two-, three-, and four-person households.⁶ A $10.00 per hour wage also keeps a worker below the poverty level if the worker is the sole earner supporting a household of three or more people. A $10.00 level should therefore be considered a floor in 2021, and increases above that level in future years may yield better child and family outcomes, but further research is warranted as more states implement at higher levels.

According to the Economic Policy Institute (EPI), if all states raised their minimum wages to at least $15.00 by 2025, whether through a federal mandate or state legislation, 32 million workers, or 21 percent of the US workforce, would see a raise, and approximately 28 percent of those who would benefit are parents.⁷ In particular, women and workers of color would benefit from minimum wage increases to $15.00 because they comprise a large share of those currently paid under that level.⁸ A federal $15.00 minimum wage would mean that 31 percent of Black workers and 26 percent of Latino^v workers would see a raise, and six in 10 people who would benefit are women.⁷ Among hourly workers, women are twice as likely as men to earn the minimum wage or below (2% compared to 1%).⁵

The Congressional Budget Office (CBO) estimated in a 2019 report that if all states raised their minimum wages to at least $10.00 per hour by 2025, 1.5 million workers would see their wages increase, family income would increase by $400 million overall for those who would otherwise be in poverty, and this option would lead to a smaller decrease in employment than a $12.00 or $15.00 federal minimum wage.⁴⁴ As of October 1, 2021, 22 states have minimum wages of at least $10.00.^4,86 A later report by the CBO in 2021 examined the impacts of a $15.00 federal minimum wage that would be fully implemented by 2025 and found that 17 million workers currently making under $15.00 would see a pay increase, although job loss would affect approximately 1.4 million workers.⁷⁵ Total pay for directly or potentially affected workers^vi would increase by $333 billion from 2021 to 2031, and poverty would decline by 0.9 million people. The findings from the EPI and the CBO reports together suggest that a $15.00 minimum wage would benefit between 17 and 32 million workers, depending on the inclusion of directly and indirectly affected workers.

Some workers remain uncovered even by the protections of the current federal minimum wage because of exceptions carved out in the Fair Labor Standards Act.⁸⁷ Wage levels for tipped workers vary from a low of $2.13, in states where the tipped wage is set to the federal subminimum, to a high of $14.00 in California, where tipped workers are currently paid the same minimum wage as nontipped workers.^62,86 See Table 3 at the end of this review for details by state. Employers are legally required to make up the difference if tips fall short (the supplement is called a “tip credit”), but the tipped wage shifts the burden of wages onto customers, whose tipping practices may be inconsistent for a variety of reasons, and may result in more precarious and unstable wages for workers.

According to the EPI, 1.3 million American workers are currently subject to the $2.13 tipped wage floor, and another 1.8 million are subject to a level above $2.13, but still less than their state’s regular minimum wage.⁷ The subminimum wage contributes to disproportionate poverty among tipped workers, and 46 percent of such workers rely on public benefits to make ends meet, compared to approximately 35.5 percent of workers covered by the full minimum wage.⁵³ In addition, this policy leads to inequitable wages for workers of various racial and gender groups, who have been shown to receive disparate tips because of racism, sexism, and other forms of bias.⁷¹ The policy also opens the door to wage theft if employers do not comply with the requirement to supplement tips to reach $7.25 per hour. A 2014 report by the EPI noted that the Department of Labor’s compliance investigation of 9,000 restaurants between 2010 and 2012 found 1,170 tip violations, totaling $5.5 million in wages that should have been paid but were not.⁵³

Other classes of workers, including individuals with disabilities, are also exempt from the full minimum wage in the Fair Labor Standards Act. Certain firms, primarily those known as “sheltered workshops,” which offer employment to individuals with disabilities separately from others, can obtain certificates from the federal government allowing them to pay workers as little as $1.00 per day.⁶⁵ Advocates for individuals with disabilities have been working to eliminate this exemption in many states.⁸⁴

In April 2021, President Biden signed an executive order (No. 14026) requiring all federal contractors to pay a minimum of $15.00 per hour to workers beginning on January 30, 2022.⁷⁹ This floor was previously set at $10.10 under the Obama administration and was indexed to inflation, rising to $10.95 just prior to the 2021 executive order. The 2021 order will also eliminate tipped wages for federal contractors by 2024 and will eliminate subminimum wages for federal contractors with disabilities.

What Are the Funding Options for State Minimum Wage Increases?

Evidence shows that the costs of minimum wage increases are typically absorbed by employers and to some extent by consumers, as a result of slight price increases. For example, research from Princeton University found that a 10 percent minimum wage increase boosts the price of a McDonald’s Big Mac by just 1.4 percent and has no significant impact on restaurant entry or exit into the market.⁷⁶

Raising state minimum wages may save taxpayer costs, however, by boosting earned income and reducing the amount of support workers may need from public assistance programs.^B,J An analysis by the University of California, Berkeley estimated that a $15.00 federal minimum wage may potentially save up to $107 billion in state and federal safety net spending that currently supports individuals in states with a minimum wage below $15.00.⁷² For example, spending for the Supplemental Nutrition Assistance Program would likely decline because fewer individuals would have earnings that fall below the threshold that the government has determined is necessary to qualify for food assistance.

Many large employers, such as Amazon and Costco, have recently raised their minimum wages significantly above federal and state floors (e.g., to $16.00 per hour), with business leaders noting that higher pay can improve employee retention and performance and may therefore benefit their businesses in the long run.⁶⁷

3. For example, a local living wage policy may require that “firms receiving contracts from local governments must pay their workers enough to provide an above-poverty standard of living”⁶⁸ (p. 3).
4. The federal tipped minimum wage is $2.13.
5. This study used “Latino” rather than Hispanic.
6. “Potentially affected” or “indirectly affected” workers are those making just slightly above the proposed minimum wage, who may see an increase as wage distributions change in response to the higher wage floor.

Raising the wage floor can boost the incomes of low-wage workers and their families, and in some cases lift them out of poverty. Higher family incomes can, in turn, lead to better social, economic, and health outcomes for parents and children. Greater access to resources such as housing, food, health care, and transportation can lower parental stress, improving a child’s caregiving environment and reducing the likelihood that a child will experience abuse, neglect, or other adverse experiences at home.¹⁰ Higher minimum wages may also facilitate greater health care access among parents and children, including greater prenatal care use, which may improve birth outcomes and affect children’s later health status.^H,I,48

Raising the minimum wage is a contentious policy issue because of concerns regarding unintended consequences. For example, some scholars expect that to pay for higher wages, employers may cut the number of jobs or work hours for low-wage workers, with detrimental impacts on employment and family income that may offset the increased wages.¹¹ This argument is one of the most commonly cited (and empirically tested) objections to minimum wage increases in the literature. Other scholars contend that better-paid workers will be more productive, reducing turnover and costs associated with hiring and training new workers.¹² Still others argue that some reductions in work hours observed after a minimum wage increase may reflect a rational choice by workers themselves to work fewer hours, and gain leisure time, while still earning the same overall income given the higher hourly wage.⁴⁰

Another anticipated effect of an increased minimum wage is that prices will increase, passing the cost of the higher wage to consumers, or that employers may cut or freeze the wages of higher-income workers to compensate for the increases for lower-wage workers (leading to “wage compression,” which describes a trend toward a smaller difference in pay between the lowest-paid and highest-paid workers).

Some stakeholders worry about the impact of higher minimum wages on the child care industry, specifically the possibility that employers will raise child tuition to cover higher employee wages, pushing the cost burden onto families who may already struggle to afford the cost of care.¹³ If a higher minimum wage incentivizes greater employment among some parents, then access to affordable and high-quality child care may become even more critical if more workers require care or additional care hours.^42,43

Another concern is that higher wages may push families just over the income eligibility thresholds for child care subsidies or other public benefits, preventing them from receiving support even when they still need the assistance. Finally, some scholars argue that a higher minimum wage is not a well-targeted policy lever for reducing poverty, given that many minimum-wage workers, such as adolescents working a part-time job, may belong to high-income households.

The empirical evidence addressing some of these considerations is presented later in this evidence review.

Historically, most of the research on minimum wage policy, both federal and state, has focused on overall economic impacts such as income and employment effects. Very limited research, until the past decade, has examined how minimum wage increases impact child and family poverty, birth outcomes, and parent and child health, but the emerging evidence finds positive impacts in these areas. This review identified 17 strong causal studies that examined the impacts of higher state and local minimum wages specifically for families, children, and parents. The literature on the minimum wage is vast, and many additional rigorous studies offer important findings on employment, earnings, health, and other outcomes for adults or national samples more generally. These findings are mentioned throughout this review but are not the focus.

Most of the studies in this review examined incremental increases in state minimum wages, such as the impacts of a $1.00 increase,^G a 10 percent increase,^D or a given increase above the federal level,^E rather than examining the impacts of a particular minimum wage level. However, a review of the state data included in the studies found that most of the empirical evidence revealing beneficial impacts extended to minimum wages up to the $10.00 level. Some studies showed positive impacts for minimum wages as high as $15.00,^46,47 but such studies employed simulations and estimates projecting future impacts, rather than examining the effects of increases that had already been implemented, or they were focused on specific localities (e.g., New York City, Santa Clara County) rather than statewide increases. More statewide research on the effects of a $12.00 to $15.00 minimum wage, as more states implement wages in this range, will be valuable for confirming the threshold that provides the greatest impact to families with the least detrimental impacts on employment.

The research discussed here meets our standards of evidence for being methodologically strong and allowing for causal inference, unless otherwise noted. Each strong causal study reviewed that focused on the impact of state and local minimum wages on families with children has been assigned a letter, and a complete list of causal studies can be found at the end of this review, along with more details about our standards of evidence and review method. The findings from each strong causal study reviewed align with one of our eight policy goals from Table 1. The Evidence of Effectiveness table (Table 2) displays the findings associated with higher state minimum wages (beneficial, null,^vii or detrimental) for each of the strong studies (A through Q) in the causal studies reference list. For each indicator, a study is categorized based on findings for the overall study population; subgroup findings are discussed in the narrative. The Evidence of Effectiveness table also includes our conclusions about the overall impact on each policy goal. The assessment of the overall impact for each studied policy goal weighs the timing of publication and relative strength of each study, as well as the size and direction of all measured indicators.

Of the 17 causal studies included in this review, nine examined how outcomes differed by race or ethnicity (beyond simply presenting summary statistics or controlling for race/ethnicity).^viii Where available, this review presents the analyses’ causal findings for subgroups by race/ethnicity and other aspects of variation, such as family structure, age, or citizenship status. A rigorous evaluation of a policy’s effectiveness should consider whether the policy has equitable impacts and should assess the extent to which a policy reduces or exacerbates pre-existing disparities in economic and social wellbeing.

*Trending indicates that the evidence is from fewer than two strong causal studies or multiple studies that include only one location, author, or data set.

Access to Needed Services

Two studies identified for this review examined the effects of a higher minimum wage on access to medical and prenatal care, finding null results.^H,K A 2020 study examining 46 million births from 1989 to 2012 found that a $1.00 increase in state minimum wages led to no significant increases in the number of prenatal visits or in the likelihood of a mother receiving care in the first trimester, although both results were in the beneficial direction.^H A 2019 study examined the impact of higher minimum wages on children’s health care access from 2000 to 2015, finding overall null results for the likelihood of health insurance coverage, having a medical home (a consistent place to receive medical care), and frequency of doctor’s visits (e.g., child saw a doctor in the past year, child had more than one visit in the past year, child had a checkup in the past year).^K,ix

Subgroup analyses revealed results in various directions that do not clearly align with the theory of change—for example, children with immigrant parents were significantly less likely to have had a checkup in the past year with a higher minimum wage.^K Results for all groups were null when the authors examined whether a child saw a doctor at all in the past year and whether a child saw a doctor for behavioral/mental health needs. More research examining the impact of higher wages on access to health care, including prenatal care, would be valuable, given that only two causal studies currently inform the conclusions for this policy goal.

Parents’ Ability to Work

The possibility that higher minimum wages may lead employers to cut jobs or reduce the number of hours offered to employees is one of the most frequently cited objections to boosting the wage floor. Evidence suggests that state minimum wage increases have mixed effects on employment and hours for low-wage workers,^x with most wage increases leading to small, statistically insignificant reductions in employment or no effects at all.^45,49,50 Most studies that have found detrimental impacts on employment have examined specific cities or industries rather than statewide increases, have examined levels between $13.00 and $15.00, and/or have found small effect sizes that are outweighed by increased wages, leaving most families better off overall.^{32,46,51,52,M} Some scholars have argued that the minimum wage’s labor supply effects on parents with young children may be different than the findings for adult workers overall, because parents are eligible for different means-tested transfer programs and “face fixed costs of work in the form of childcare [payments]” that other workers may not face (p. 29).^J A higher minimum wage may allow parents to “overcome these costs and enter the labor force” (p. 29).^J Therefore, an understanding of the minimum wage’s effects on the prenatal-to-3 period requires an examination of studies that focus on parents with children rather than samples of workers in general.

Among the five studies in this review that focused on employment effects for families with children, two found positive impacts on parental employment.^F,J A 2011 study using data from 1997 to 2006 found that a 10 percent increase in a state’s minimum wage increased the employment of single mothers (ages 21 to 44) by 7.4 percent when coupled with a 10 percent state earned income tax credit (EITC).^F The effects were even greater (9.5 percent) when limiting the sample to lower educated mothers, who are often the population most affected by a minimum wage increase. A higher wage may therefore incentivize parents to enter the workforce when paired with policies like the EITC, which amplify the returns of each hour of work. This study also found that a higher minimum wage boosted the positive earnings and employment effects of the EITC for single Black or Hispanic mothers to a greater degree than for White mothers.

A 2019 study using data from 1980 through 2015 found that a 10 percent boost in the minimum wage increased the likelihood that children of mothers with no college degree had a working parent by 4 percent, with the greatest effects for children ages 0 through 5 (a significant increase of 7.4% in parental employment).^J These results were driven by a significant increase in employment among single mothers and married fathers. The study showed null effects overall for hours/weeks worked conditional on employment, but effects were significant and positive for Black mothers’ employment and their annual hours (over 299 additional hours worked per year). The study’s findings, with the greatest positive effects for families with young children (under age 6), are consistent with the authors’ hypothesis about child care costs as a barrier to work for low-wage parents, and the positive impacts that a higher wage can have for facilitating greater employment.^J

Another 2019 study, by the same authors as the paper discussed above (Study J), examined minimum wage increases specifically in low-wage regions of the US and detected no significant adverse effects on employment or hours worked.^C The study did not find that higher minimum wages had significantly different effects by race (though it did find significant reductions in child poverty in low-wage areas, discussed in the Sufficient Household Resources section of this review).

A report by the National Academies of Sciences, Engineering, and Medicine (NASEM) employed rigorous simulation techniques to estimate the impacts that a variety of economic policies would have on child poverty.^M The report examined two possible minimum wage changes using 2015 data. The first was “an increase in the federal minimum wage to $10.25 in 2020 dollars [$9.15 in 2015 dollars], in all states” and the second scenario was one in which “the new value for the regular minimum wage in each state equals the lesser of $9.15 or the 10^th percentile of the hourly earnings distribution in that state” (p. 506).^M The authors found that the first policy would reduce child poverty, as measured by the Supplemental Poverty Measure,^xi from 13 percent to 12.8 percent, and the second scenario would lead to a slightly smaller reduction, bringing child poverty to 12.9 percent. The 0.2 percentage point reduction for the first policy translates to approximately 1.4 million fewer children in poverty, given that the 2015 population of children ages 0 to 18 was approximately 73.6 million.⁷⁸

The NASEM report estimated an associated job loss of 121,000 among adults and 28,000 among teenagers as a result of the first minimum wage policy, and a smaller impact with the second policy. The two policies would have additional positive impacts on earnings and tax revenue, however. According to the authors, “the two minimum wage policies actually reduce net government expenditures, owing to the fact that they increase earnings, so tax revenues on the earnings increase and expenditures on benefits from transfer programs decrease” (p. 160).^M This finding suggests that despite some job loss, workers and families may be better off overall as a result of increased earnings and reduced poverty.

A 2020 study using the Fragile Families and Child Wellbeing data set, which followed approximately 5,000 children born between 1998 and 2000 in 20 cities in 15 states, aimed to examine how local minimum wage increases affect child-parent interactions, such as discipline behaviors like spanking, and the authors examined employment as a possible mechanism that may influence parenting behaviors.^Q The authors found no significant impact of higher minimum wages on maternal or paternal employment at age 3. However, maternal employment was significantly reduced at age 5 by 3.6 percentage points.

Studies that focus on large samples of adults or workers in general, rather than parents or families, are not included in the Evidence of Effectiveness table (Table 2), but they find similarly mixed results for employment. One of the earliest and most widely cited studies of state minimum wage increases was a 1994 analysis of the fast food industry in a region that included the New Jersey and Pennsylvania border.⁵⁴ The study found that employment in New Jersey, which had raised its minimum wage by 80 cents, actually increased 13 percent relative to neighboring Pennsylvania, which did not raise its wage. Three additional studies have found null impacts of higher minimum wages on employment,^45,49,50 and three others have found small negative impacts.^46,51,52 For example, two studies identified possible job loss in the range of 1,350 to 5,000 fewer jobs per year resulting from city-level increases to $13.00 and $15.00 in Seattle and Santa Clara County, respectively.^46,51

Sufficient Household Resources

Evidence from five studies^xii suggests that minimum wage increases lift earnings for low-wage workers and families, leaving them better off given the mostly null or small effects on employment.¹⁹ (Four additional studies also support higher state minimum wages as an effective policy to boost household income,^32,45,46,50 but their samples were not specific to families with children and effects are therefore not shown in Table 2).

For example, a 2019 study using national data from 1984 to 2013 found that a 10 percent minimum wage increase led to a significant 4.9 percent reduction in child poverty (under age 18).^B Significant, large effects were also found for Black and Latino^xiii individuals (a reduction in poverty of 8.7%), and people under age 30 without a high school degree (a 4.3% reduction in poverty). The results suggested that if all states were to raise their minimum wages from their January 2017 levels to $12.00, the US would see a 1.9 percentage point (or 15%) reduction in poverty, representing 6.2 million people transitioning out of poverty. The author also projected a 12.2 percent ($1,826) annual increase in after-tax-and-transfer family earnings among the lowest-income families (those near the 10^th percentile).^B

Evidence also supports the combination of a higher minimum wage and more generous earned income tax credits (EITCs) as an effective anti-poverty approach. A 2011 study using data from 1997 to 2006 found that a 10 percent increase in the minimum wage, coupled with a 10 percent state EITC,^xiv led to an 8.3 percent increase in earnings for single mothers.^F The authors concluded that a 10 percent state EITC reduced poverty among single-mother families with children by 1.6 percentage points at the sample mean of state minimum wages, but reduced poverty by 2.3 percentage points when the minimum wage was 10 percent higher than the mean, and by 3.4 percentage points when the minimum wage was 25 percent higher than the sample mean.^F

A 2019 study measuring effects from 1980 to 2015 found a significant increase in earned income ($349 in annual earnings, amounting to almost an additional week’s wages at a $10.00 per hour level) for families headed by single mothers following a 10 percent minimum wage increase.^J The study found that a 10 percent increase in a state’s minimum wage reduced poverty by 0.6 percentage points, or 5.9 percent, among children with mothers with no college degree. The effects were found to be greatest (9.7%) for children under age 6. A 2008 study using data from 1991 to 2002 found that a 10 percent increase in the real minimum wage (adjusted for inflation) reduced the child poverty rate in single-mother families by 1.8 percentage points.^L

A 2021 study examining data from 2005 through 2017 found that higher minimum wages led to significant reductions in child poverty (1.3 percentage points) in regions of the country with the lowest median wages,^xv where proportionately more individuals benefited from minimum wage increases.^C The study did not disaggregate the child poverty effects by race or ethnicity, but did examine parent employment and wages by race and ethnicity. The positive wage effects were slightly greater for Black and Hispanic workers with a high school degree or less (a 0.6%, statistically significant increase) compared to White non-Hispanic individuals of the same education level (a 0.5% increase, not statistically significant).^xvi In the lowest-wage areas, the differential wage effects were even greater with a higher minimum wage: a 2.2 percent increase in wages for Black and Hispanic workers compared to a small, statistically insignificant 0.4 percent decrease for White non-Hispanic workers.

As discussed in the previous section, the 2019 NASEM report also found significant, positive impacts on family earnings and child poverty with higher minimum wages, at approximately the $10.00 level.^M The analysis simulated how the higher minimum wage policies would affect subgroups differently, and did not detect a differential effect of either of the minimum wage scenarios on Black or Hispanic children. However, the study did find that the first minimum wage policy would benefit noncitizen children to a greater degree than children overall (see Table 5-1 of the NASEM report).

Two of the studies discussed above also found significant reductions in the receipt of public benefits alongside reduced poverty and higher earned income, suggesting that families achieved better economic security after minimum wage increases, even after accounting for the reduction in public assistance.^B,J

Finally, a 2020 working paper found no significant effects of local minimum wage increases on annual household income at child ages 1 or 3 or on child support payments.^Q This result may be viewed as an outlier in the context of the many other positive results for household income and poverty reduction.

Healthy and Equitable Births

Although a large research base links greater overall income and wealth to better health across the life span, comparatively few studies have examined the relationship between higher minimum wages and birth outcomes.^20,21 However, six recent studies, discussed below, have begun to build the evidence base in this area with modest results in the positive direction.^xvii

A 2016 study examined data on birth outcomes from 1980 to 2011 across the US and found that state minimum wages that were higher than the federal floor were significantly linked to a reduced prevalence of low birthweight and postneonatal mortality.^xviii,E In particular, each dollar above the federal minimum wage led to approximately a 1 to 2 percent decrease in the prevalence of low birthweight (<2,500 grams) and a 4 percent decrease in postneonatal mortality.^E

A 2020 analysis examined 46 million births to women with a high school degree or less between 1989 and 2012 and found that a $1.00 minimum wage increase was linked to a significant 2 gram increase in birthweight and very small, but statistically significant increases in gestation length (0.01 weeks) and fetal growth (0.03 grams per week).^H The $1.00 wage increase had small, insignificant effects on reducing the number of preterm births in the authors’ preferred specification.^H

A 2018 study using data from 1995 to 2013 found that a 10 percent increase in the cost-of-living adjusted minimum wage was associated with a significant 5.6 percent reduction in postneonatal mortality^xix among mothers with a high school degree or less.^D The effect was also significant for the sample of mothers overall, regardless of education level (a 4.5% decrease).

Research suggests a causal connection between higher state minimum wages and reduced teen births. A 2017 study of birth rates in the US from 2003 to 2014 found that a $1.00 increase in a state’s minimum wage led to a 2 percent decrease in births to adolescents.^A Overall, this result means that a national $1.00 increase in the minimum wage may lead to 5,000 fewer teen births each year. The decrease was driven by Hispanic and non-Hispanic White teens, who were more likely to be employed than Black teenagers in the sample. The author reasoned that “[h]igher wages might keep adolescents attached to the labor market…and thus provide a reason to delay childbearing or offer a chance to substitute work for leisure” (p. 1).^A

A 2021 study using data from 1995 to 2017 also found a positive link—each $1.00 increase in a state’s minimum wage led to a decrease in teen births (15 to 19 years old) of 2.8 to 3.4 percent, depending on the number of controls included in the model.^P Notably, the author found that the relationship was significant only in states that had their own earned income tax credits. This finding suggests that higher state minimum wages can work alongside policies like federal and state EITCs to have the greatest positive effect on children and teens in low-income families—a result seen in other studies as well.^F,P  

A 2020 study assessed the impacts of higher subminimum wages on birth outcomes—subminimum wages are the wages that can be paid to tipped workers, which are often set much lower than the floor for nontipped workers.^O The federal subminimum wage was set at $2.13 per hour in 1991 and has remained static since then, even though the federal full minimum wage has increased multiple times since that year.⁵³ The 2020 study used state variation in tipped wages from 2004 to 2016 to examine the effects on infant size for gestational age, and the authors found that when the tipped wage was set at the federal full minimum wage level, the birthweight of the smallest 5 percent of infants increased, and the birthweight of the largest 5 percent of infants decreased, leading to overall healthier birthweights for gestational age.^O

Finally, a 2021 study using data from 2001 to 2018 examined the relationship between state wage preemption laws (state laws that prevent cities, counties, and other local jurisdictions from adopting minimum wages higher than the state level) and infant mortality.⁶² The study found that each additional $1.00 increase in state minimum wages was associated with a 1.3 percent reduction in the infant mortality rate, and as a result, state preemption laws that restricted local increases were linked to as many as 605 preventable infant deaths in 2018.⁶² The authors consider their analysis to offer “compelling evidence of a causal effect”^xx of preemption laws, without establishing a definite causal relationship, so the results are not reflected in Table 2.

Parental Health and Emotional Wellbeing

This review identified three causal studies that examined the impact of minimum wages specifically on the physical or mental health of parents.^H,N,Q A 2020 national study using data from 1989 to 2012 found that a $1.00 increase in a state’s minimum wage was not associated with a significant decline in smoking during pregnancy,^H,xxi and was actually linked to a small increase in the number of cigarettes that pregnant women smoked (given that they smoked at all), likely because of the “income effect,” or the tendency to purchase more of certain goods when income increases. The effect was 0.2 cigarettes per day for each $1.00 increase in a state’s minimum wage (from a sample mean of 2.1 cigarettes per day).

A 2020 study using data from 2004 to 2014 found that setting the tipped wage at the same level as the federal full minimum wage ($7.25) reduced prenatal poverty-related stress scores^xxii by 19.7 percent among unmarried women of color (defined as non-White and/or Hispanic) with no college degree compared to setting tipped wages at the subminimum ($2.13) level.^N The study also found significant results for unmarried women overall (a 15.9% decrease in stress) and for women of color (regardless of marital status—a 10.2% decrease). The 2020 paper using the Fragile Families and Child Wellbeing data set, mentioned earlier, found no significant impact of local minimum wage increases on maternal depression or stress at child age 3.^Q

A much broader array of studies have examined impacts on adult health more generally, with samples that included both parents and nonparents, and the overall results are more positive when these studies are considered. For example, a simulation study of adults in New York City estimated that a $15.00 minimum wage, had it been implemented between 2008 and 2012, may have prevented between 2,800 and 5,000 premature deaths (deaths before age 65) in that timeframe in low-income communities.⁴⁷ Both large and small employers currently must pay a minimum wage of at least $15.00 in New York City.²²

Three causal studies have examined links between state minimum wages and adult mental health (regardless of parental status), finding overall positive results. One study examined the effects of higher minimum wages on suicides, estimating that a 10 percent increase in a state’s minimum wage may reduce nondrug suicides among adults with at most a high school degree by 2.7 percent, and the authors noted that higher wages may have prevented 4,800 suicides over the 19 years of data analyzed (from 1999 through 2017).⁵⁶ The authors also examined the impacts of state earned income tax credits, estimating that if both the minimum wage and state EITCs were increased by 10 percent across states, the US may see 787 fewer completed suicides per year. A 2020 study (using data from 1990 through 2015) corroborated those results, finding that a $1.00 increase in state minimum wages reduced suicides by between 3.4 and 5.9 percent for less-educated adults.⁵⁶

A 2019 correlational study using data from 2006 through 2016 found that a $1.00 increase in state minimum wages was associated with a 1.9 percent decline in suicides.²³ This finding translates to 8,000 fewer suicides during the study years. Finally, a 2021 study found statistically insignificant, though beneficial, effects of a higher minimum wage on the proportion of adults who reported themselves to be in serious psychological distress (a 6% decrease).⁵⁸

A higher minimum wage may also have impacts on adult physical health; a recent longitudinal study using 13 years of data found that a $1.00 increase in a state’s minimum wage led to lower rates of sexually transmitted infections (STI) among women; the authors measured between an 8.5 percent and 19.7 percent drop depending on the specific STI.⁵⁹ The authors’ theory was that “poverty, low-wage jobs, income inequality, and other economic structural factors may spread STIs by creating high-risk partner pools, facilitating transactional sex, and perhaps undermining women’s sexual agency” (p. 2).

However, a 2021 study using data from 2008 through 2015 found null effects on adult health outcomes including diabetes, hypertension, overall health, and obesity for the full sample, although women saw an increased likelihood of diabetes with a higher minimum wage, men saw a higher likelihood of obesity, and men saw a lower likelihood of hypertension.⁵⁸ The authors suggested that a variety of mediating factors complicate the link between higher pay and health; for example, outcomes like obesity have genetic contributions, and some individuals may still not have access to affordable health coverage even with a higher wage.

A recent analysis examined how a higher minimum wage in New Jersey may affect adults’ eligibility for Medicaid given the Affordable Care Act’s (ACA) expansion in health coverage for low-income adults.⁶⁹ The authors concluded that less than 5 percent of adults (excluding elderly individuals or people with disabilities) on Medicaid would lose Medicaid eligibility as a result of a $15.00 minimum wage, and all would still qualify for ACA subsidies to help them afford health coverage. Overall, family earnings would rise by 17 percent, or an average annual increase of $6,700 in the state.

Nurturing and Responsive Child-Parent Relationships

One study with rigorous methods addressed the impacts of higher minimum wages on child-parent relationships, finding mixed results.^Q The authors of the 2020 study found that a $1.00 minimum wage increase was linked to a decline in spanking of children at age 3 by both mothers and fathers (spanking was approximately 7.8 percentage points lower among fathers and 7.4 percentage points lower among mothers affected by the higher minimum wage). Mothers and fathers were each asked to report their own answers for the spanking measure. Mothers were also asked to report how often they, and the child’s biological father, participated in certain activities with children, including: “read stories, told stories, played with blocks or toys, played games, and played outside, among others” (p. 12). The impact of minimum wage increases on maternal activities at age 3 was not significant, whereas paternal activities (as reported by mothers) saw a slight significant increase at age 3 (phasing out by age 5).

Nurturing and Responsive Child Care in Safe Settings

Child care workers are much lower paid, on average, than educators in the public pre-K to grade 12 system.⁶⁰ Many scholars and advocacy groups argue that paying child care workers more would improve staff retention and boost the quality of child care, ultimately leading to better outcomes for children.⁶⁰ According to the National Women’s Law Center (NWLC), one in 10 child care workers lives below the federal poverty level, which is twice the poverty rate for all workers.⁶⁰ The Bureau of Labor Statistics reported that the median hourly wage for child care workers was $12.24 in 2020, which was significantly lower than the national median hourly wage ($20.17).⁸⁰ The NWLC reported in 2020 that “the child care workforce is 93% women and approximately 40% women of color” (p. 3), so the low wage in this industry has disproportionate impacts by race and gender, exacerbating existing inequities.⁶⁰

If caregivers struggle with meeting their own basic needs and experience stress as a result, their interactions with children in a child care setting may not be conducive to optimal child outcomes. Recent findings from an ongoing study of child care workers in centers in Seattle and South King County, Washington (where minimum wages were at $15.00 and $12.00, respectively, during the study), and in Austin, Texas (where the federal level of $7.25 continues to apply, per Texas law), found that wages below the median at each site were associated with worse worker health for some indicators (stress, general health, BMI, and cholesterol).⁸⁵

However, the interaction between higher minimum wages and the child care sector has raised concerns about the supply and affordability of care.²⁷ A descriptive study examined the responses of Seattle child care providers to the city’s gradual minimum wage increase from $9.47 to $15.00 ($16.39 for large employers) between 2014 and 2021.¹³ The study’s survey of 41 child care centers found that by 2017, 90 percent of the centers had raised prices to account for the increased minimum wage, and the second most common response was to reduce hours or staff.

A 2021 report estimated that a $15.00 federal minimum wage may lead to child care prices rising by 21 percent, or equivalent to a cost of over $3,700 per family per year in a household with two children.⁷⁰ However, data suggest that child care workers themselves may be better able to support their own families if they were paid a higher wage.⁷⁷ A minimum wage increase to $15.00 by 2025 would have a significant positive impact for child care workers, over a third of whom are Black or Hispanic.⁸² Such an increase would raise pay for 44 percent of child care workers, with an average boost of $2,900, and annual earnings of Black and Hispanic child care workers would increase over $3,100.⁸² This policy would greatly reduce pay disparities within child care and across the country; the 10^th percentile wage in the child care industry would increase by 42 percent, and child care workers in southern states would benefit disproportionately since their state minimum wages are currently lower than in other regions of the country.⁸²

Only one causal article addressing the prenatal-to-3 period examined impacts of higher minimum wages on child care, finding that an increased minimum wage had no significant impact on the number of child care arrangements at ages 3 or 5.^Q More rigorous, empirical research on family and provider responses to higher minimum wages as they relate to child care would be valuable to the prenatal-to-3 field; in particular, research is needed that allows for an assessment of the impact of wages on child care workers, providers, and families simultaneously.

Optimal Child Health and Development

Evidence suggests that higher minimum wages may have positive impacts on children’s health outcomes. Researchers at the University of Iowa College of Public Health began an ongoing project in 2019 to examine the links between minimum wages and long-term child health and development.²⁴ A 2020 study published as part of that project (using data from the 2003, 2007, and 2011/12 waves of the National Survey of Children’s Health) found that a $1.00 increase in state minimum wages during pregnancy had a null effect on children’s health, but a $1.00 increase from birth through age 5 had a significant positive impact on the likelihood that a child was reported to be in excellent or very good health from ages 6 through 12 (an 8.7% increase).^I A $1.00 increase through age 5 also significantly reduced the likelihood that children would miss school from ages 6 through 12 because of illness or injury (a 15.6% reduction in the number of missed school days).

A 2020 study using survey data from 2000 through 2015 found no overall significant effects of higher minimum wages on the health outcomes of children (including those with immigrant or native parents) in the US (such as health rating on a scale of poor to excellent, frequency of emergency room visits, or frequency of specific illnesses).^K

A 2017 study (using data from 2004 to 2013) revealed that higher state minimum wages led to reduced child maltreatment rates; in particular, the authors found a 9.6 percent reduction in neglect reports with each $1.00 increase in a state’s minimum wage (a 10.8% reduction for children ages 0 to 5).^G Effects were not significant for physical abuse, but were in the beneficial direction (a reduction of 15 reports per 100,000 children for each $1.00 increase). This finding is consistent with prior research on the link between poverty and child neglect reports,²⁵ and the results suggest that higher minimum wages may be an effective tool for improving child welfare by improving parents’ ability to meet their children’s material needs.²⁶ This study found no differences in the impacts of minimum wages by race or ethnicity.

7. An impact is considered statistically significant if p≤0.05. Results with p-values above this threshold are considered null or nonsignificant.
8. The studies, as labeled in our reference list, are studies A, B, C, F, G, J, K, M, and N.
9. Study K included some indicators in the 2019 Institute of Labor Economics version that were not included in the 2020 published paper. Table 2 reflects indicators from both papers because correspondence with the authors confirmed that the 2019 results are still valid but were not the focus of the 2020 paper.
10. See studies C, F, J, M, and Q.
11. The Supplemental Poverty Measure is an alternative way that the US Census Bureau measures poverty that accounts for cash and in-kind public benefits, taxes, and certain expenses when measuring household income. The measure also sets different thresholds for poverty than the official measure, adjusting for family size and regional housing costs.
12. See studies B, F, J, M, and Q.
13. The referenced report used “Latino” rather than Hispanic.
14. The study did not require the 10 percent supplement to be refundable in this analysis, but the authors noted that over 80 percent of the families in the sample who lived in states with an EITC were in states with a refundable EITC.
15. In particular, the study found that the reduction in child poverty was significant in regions of the country where the ratio of the minimum wage to the median wage was 0.6 or greater. (See Table 2, column 4 in the original study).^C
16. See Table A3, column 1 in the original study.
17. See studies A, D, E, H, O, and P.
18. Postneonatal mortality refers to deaths from the end of first month to the end of the first year of an infant’s life. Infant mortality more generally refers to deaths at any time in the first year.
19. The infant mortality effect in this study was a 3.2 percent reduction, but it was only marginally significant (p<0.1) when state policy controls were included.
20. This characterization was offered in email correspondence.
21. Given the risks that smoking while pregnant can pose to infants’ health, in addition to that of their mothers, this outcome could also be considered part of the “Healthy and Equitable Births” goal.
22. Scores were derived from summing and weighting the occurrence of 10 stressful antenatal events (e.g., moved to a new address, experienced homelessness, separated from partner, lost job, etc.).

Large gaps in wages, annual income, and wealth persist between White and Black workers; a 2020 report showed that White workers earn, on average, 25 percent more in annual income than Black workers.^28,xxiii Women, Black workers, and Latino^xxiv workers are disproportionately paid less than $15.00 per hour compared to their White counterparts, and wage disparities can contribute to income and wealth disparities.⁸ White families’ median net wealth is estimated at 10 times that of Black and Latino families.⁸

Many of the studies analyzed for this review revealed differential impacts of state minimum wages by race, gender, and/or education level. For example, a 2019 study found that increases in state minimum wages reduced poverty to a greater degree for Black and Latino individuals and for workers with less education compared to the population overall.^B A 2011 examination of the interaction between the EITC and higher minimum wages also found that positive earnings effects were strongest for Black and Hispanic women with lower education levels.^F Research suggests that local minimum wage increases to $15.00 and above in cities such as San Jose and Los Angeles will significantly benefit Hispanic workers, who will account for 53 percent and 80 percent, respectively, of affected workers in those cities once the increases are fully phased in.²⁹

A study that was not included in Table 2 because of limitations to causal inference found that higher state minimum wages significantly reduced infant mortality among infants born to Black mothers (a 20% reduction among states at or above the 75^th percentile of state minimum wage levels), whereas no significant impact was found for infants with White mothers.³⁰ The overall rate of infant mortality among Black infants has been found to be more than twice that of infants born to non-Hispanic White mothers, so this study provides promising evidence that higher state minimum wages may reduce disparities in this outcome.^30,31 Further causal research on this link would be valuable to corroborate these results.

As described in the Parental Health section of this review, a higher subminimum wage may reduce antenatal stress particularly among women of color with less than a college degree.^N More research on the effects of higher subminimum wages would broaden the evidence base for marginalized populations, such as young women of color, who are disproportionately paid subminimum wages.^N

Two additional studies that were excluded from our analysis of impacts in Table 2 (because they did not focus on families and children) provide insight into how higher minimum wages may affect marginalized populations, including immigrants and individuals involved in the criminal justice system.^32,34,37 One study found that higher minimum wages can reduce the incarceration rate in the US³²—the country with the highest current rate.³⁵ In particular, a $1.00 increase in a state’s minimum wage was associated with 12 to 25 fewer incarcerations per 100,000 people, primarily driven by reductions in the jailing of men of color. The US incarcerates 698 people per 100,000, so the results represent up to a 3.6 percent reduction.³⁶

A recent study examining the impacts of higher state minimum wages on immigrants with no high school degree (including both documented and undocumented workers) found null effects on poverty and negative effects on employment: A 10 percent increase in state minimum wages was associated with a 1.1 percent decline in employment among immigrants from Mexico.³⁷ However, it is difficult to disentangle the effects of state minimum wages from ongoing changes in immigration policies that may affect where and how immigrants can safely seek employment, and which may increase exploitation by employers, who may not always pay the full minimum wage to immigrants.³⁷

A study of the historical impact of federal minimum wage increases found that the 1967 expansion of federal minimum wage coverage to new industries that employed large numbers of Black workers (agriculture, restaurants, and nursing homes, among others) had a significant, positive impact on reducing racial income inequality between Black and White workers.²⁸ Specifically, this change was found to “explain more than 20% of the decline in the racial earnings gap between 1965 and 1980” and the reform did not negatively impact employment for workers.²⁸ Nevertheless, gaps in income and wealth by race continue to limit opportunities for economic mobility among Black and Hispanic workers as compared to White workers.

In addition, the persistence of subminimum wage policies for tipped workers and workers with disabilities means that many individuals in marginalized communities are still paid at rates far lower than the federal minimum wage. The subminimum wage is a controversial policy that has been criticized for being racist, sexist, and ableist as a result of its roots in the end of slavery, when White business owners wanted to employ Black individuals but did not want to pay them a full wage.⁷¹ Eight states have eliminated subminimum wages for tipped workers, instead requiring that restaurant workers and other tipped employees receive the full minimum wage that applies to other industries (Alaska, California, Hawaii, Minnesota, Montana, Nevada, Oregon, and Washington).^61,73 Given that approximately 70 percent of tipped workers are women,⁷¹ and 45 percent of restaurant workers are people of color,⁶¹ whom research shows are often subject to discriminatory tipping practices, the subminimum wage is a critical equity issue.

Research shows that restaurant sales do not suffer, and in fact may be higher, in states that enact a single minimum wage for all.^61,73 Disagreement exists among service industry workers about which approach results in higher wages, with some surveys finding that service workers would prefer to maintain a tipped model rather than move to a higher standard wage without tipping.⁸¹

However, an important finding that is more relevant to families with young children is that in states with one standard minimum wage, “half as many tipped workers with children under age 5 are in poverty” compared to states with tiered wages.⁷³ For example, the poverty rate for tipped workers with at least one child under age 5 is 12.8 percent in the single-wage states, compared to over 24 percent in states with tiered wages.⁷³ The poverty gap between men and women in tipped positions is also smaller in states that have eliminated the subminimum wage (a gap of 1.2 percentage points compared to up to 3 percentage points).⁷³ The poverty gap for all workers, overall, is also smaller between men and women in single-wage states; a 1.4 percent gap between men and women compared to a 5.8 percent gap.⁷³

23. This study did not examine Hispanic or Latino workers.
24. The referenced report used “Latino” rather than Hispanic.

Two strong causal studies found that higher minimum wages boosted earned income and reduced reliance on public assistance.^B,J In addition, a policy brief by the Economic Policy Institute estimated that for the lowest-income workers,^xxv a $1.00 increase in hourly wages would reduce the likelihood of receiving public assistance by 3.1 percentage points (a reduction of 850,000 individuals).³⁸ A study estimating the effects of a federal minimum wage increase from $7.25 to $9.80 (which would, by default, raise state minimum wages for those states that default to the federal floor) predicted an increase in gross domestic product of $25 billion and a net increase in jobs of 100,000 over 2 years.

As mentioned previously, an analysis of the impacts of a $15.00 federal minimum wage estimated that such a policy may save up to $107 billion in state and federal public assistance benefits.⁷² However, it is important to ensure that families do not lose critical benefits (such as Medicaid or food assistance) or experience a net loss in resources as a result of a higher wage floor. An analysis of New Jersey, for example, found that the impact of the state’s incremental wage increase to $15.00 on Medicaid eligibility would be negligible, but it is important that policymakers and scholars continue to monitor the interaction between higher wage policies and other benefits to examine how low-income families may be affected.⁶⁹

A more comprehensive analysis of the return on investment is forthcoming.

25. This analysis examined individuals earning up to $12.16 per hour.

The evidence indicates that state minimum wage increases boost earnings and family incomes with minimal or no adverse effects on employment, leaving families better off overall. Studies show that minimum wage increases can reduce poverty rates, with the most significant effects in areas with the lowest median wages and for subgroups including children, Black and Hispanic individuals, and people of lower educational attainment. The evidence also suggests that higher minimum wages may lead to modest improvements in birth outcomes and may reduce child neglect rates.

Less is known about how minimum wages may affect child health past infancy and how large minimum wage increases will affect the child care market, given that many child care workers earn wages below the highest proposed levels.³⁹ Most of the studies on child and family outcomes that find positive results have examined minimum wages up to the $10.00 level, but many states^xxvi will have implemented minimum wages of at least $15.00 by 2026, based on scheduled increases in current legislation.⁸⁶ Additional research will be necessary to examine whether minimum wages at the highest levels produce more negative employment impacts than wages at the $10.00 level, for example. Evidence from a 2018 study of Seattle revealed that the city’s minimum wage increase from $9.47 to $11.00 produced better outcomes than the subsequent move from $11.00 to $13.00, but more nationally representative studies are needed to determine the optimal wage level for supporting families and producing positive outcomes.⁵¹ Beyond simulations and estimates, more empirical research on large minimum wage increases, as more states implement them, will be valuable for determining the optimal state minimum wage.

Analyses that account for changes in the real value of minimum wages (adjusting for inflation), rather than just the nominal value, will also be important. For example, the real value of the $7.25 federal minimum wage has eroded over time and is now worth 17 percent less than in 2009 when it was first set at that level.⁴¹ More research examining the differential impacts of minimum wage increases by race and ethnicity, particularly for birth outcomes, would add to the growing evidence base. Finally, evidence on how higher minimum wages affect fathers and noncustodial parents, such as through greater child support payment cooperation, would be valuable for the prenatal-to-3 field. Only one study in this review included child support as a measured outcome, finding null results.^Q

26. See the section entitled “How Do State Minimum Wages Vary Across the States?” for details.

Evidence shows that state minimum wage increases, especially those extending to $10.00 per hour or greater, are effective for increasing household resources, improving birth outcomes, and reducing child poverty, particularly in families of color. Higher minimum wages can improve parent mental health and have been shown to improve adults’ physical health in more general samples. Although evidence for children’s health is mixed, some studies have found reduced maltreatment and better long-term child health linked to exposure to higher wages during the prenatal-to-3 period. Studies of local minimum wages as high as $12.00 to $15.00 have shown some positive results, but more causal research is needed at the statewide level for wages in that range.

States vary in the level of their minimum wages in current legislation, as well as how they set their minimum wages.⁸⁶ For example, three states (Kansas, North Dakota, and Wisconsin) set their minimum wages at $7.25 by statute, whereas four states set their minimum wages to the federal minimum or at $7.25, whichever is higher (Idaho, Iowa, Kentucky, and Pennsylvania). Five states adopt the federal minimum wage in their statutory language, regardless of the level (Indiana, New Hampshire, Oklahoma, Texas, and Utah), and another five have no state minimum wage in their statutory language at all, which means they default to the federal minimum (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee). Two states (Georgia and Wyoming) set their minimum wages at levels below the federal minimum, but the federal level overrides state law. Finally, North Carolina’s statute sets a minimum wage below $7.25 as well; however, its statutory language also specifies that if the federal minimum is higher, then it overrides the lower state minimum. See Table 3 for state variation in the minimum wage level, with additional nuances by state.

The cost of living (i.e., the resources required to purchase a given set of goods and services) varies significantly across the country because of regional differences in prices. This variation means that a nominal (or “face-value”) wage of $10.00 in two different states may buy a family more in one state than another. A nominal wage can be converted into a “real wage” or “cost-of-living adjusted (COLA) wage” to account for state price differences and to compare purchasing power more consistently across states. For example, Hawaii’s prices are 19.3 percent higher than the national average, whereas Mississippi’s prices are over 15 percent lower than the national average.⁸³ Hawaii’s minimum wage, at $10.10 in 2021, actually buys less in terms of real purchasing power ($8.47) than Mississippi’s minimum wage of $7.25 (which represents $8.59 in purchasing power).

Nominal state minimum wages range from $7.25 to $15.20 (in the District of Columbia), and as of October 1, 2021, 11 other states have approved gradual increases to $15.00 (California, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, New Jersey, New York, Rhode Island, and Virginia).^4,86 Nine of these states will reach a $15.00 minimum wage by 2026, barring any changes to the states’ scheduled increases. New York’s scheduled increases are based on annual inflation, so the state may not necessarily reach the $15.00 level by 2026. Virginia will reach the $15.00 level by 2026 if the state legislature reauthorizes the increases scheduled for 2025 and 2026.

Cities such as Chicago, San Francisco, Oakland, San Jose, New York City, and Seattle have implemented local minimum wages that exceed the current state levels or that are being implemented on a faster phase-in schedule than approved state increases.⁴⁵ For example, large employers in Seattle (those with over 500 workers) are required to pay at least $16.69 per hour in 2021, whereas the state of Washington implemented a minimum wage increase to $13.69 in 2021.¹⁴ In contrast, 25 states have enacted legislation preventing cities from passing higher minimum wages than the state or federal levels (preemption laws).⁶⁴ Analyses have found that these laws have cost workers $1.5 billion in wages that they may have earned had the higher local levels been enacted.⁶⁴

As discussed in the section regarding disparities, states also vary in the minimum wages set for tipped workers (ranging from $2.13 to $14.00 as of October 1, 2021) and individuals with disabilities, who are sometimes exempted from the regular minimum wage.^16,17 A total of eight states require employers to pay tipped workers the full state minimum wage, 27 states have a subminimum wage between $2.13 and their full minimum wage, and 16 require just the $2.13 federal subminimum wage for tipped workers.^61,62 At least eight states have either eliminated the subminimum wage for individuals with disabilities or have signed legislation that will eliminate the subminimum wage by 2025—Alaska, Colorado, Hawaii, Maine, Maryland, New Hampshire, Oregon, and Washington. Other states are considering similar legislation or have issued policy statements on this issue.^84,88 For example, Arizona’s Labor Department issued a policy statement in 2007 discouraging the payment of subminimum wages to workers with disabilities, but this policy is not enshrined in law.⁸⁹

Table 3: State Variation in State Minimum Wages

“No*” denotes a state minimum wage higher than the federal minimum but less than $10.00 an hour.
“**” in the Current State Minimum Wage column indicates no state minimum wage legislated or it is set lower than the federal minimum wage of $7.25 from the Fair Labor Standards Act. The FLSA applies for covered workers in these states.
$2.13** in the tipped minimum wage column indicates no state tipped minimum wage legislated or it is set lower than the federal subminimum wage of $2.13 in the Fair Labor Standards Act. The FLSA applies for covered tipped workers in these states.
Policy adoption status data: As of October 1, 2021. State labor statutes and United States Department of Labor. Current state minimum wage data: As of October 1, 2021. State labor statutes and United States Department of Labor.
Cost-of-living adjusted minimum wage data: As of May 18, 2021. Bureau of Economic Analysis. Reflects Regional Price Parities for FY 2019.
For additional source and calculation information, please go to Methods and Sources.

26. For details on state progress implementing state minimum wages, see the state minimum wage section of the US Prenatal-to-3 State Policy Roadmap: https://pn3policy.org/pn-3-state-policy-roadmap-2021/us/state-minimum-wage/

Method of Review

This evidence review began with a broad search of all literature related to state minimum wages and their impacts on child and family wellbeing during the prenatal-to-3 period. First, we identified and collected relevant peer-reviewed academic studies as well as research briefs, government reports, and working papers, using predefined search parameters, keywords, and trusted search engines. From this large body of work, we then singled out for more careful review those studies that endeavored to identify causal links between the policy and our outcomes of interest, taking into consideration characteristics such as the research designs put in place, the analytic methods used, and the relevance of the populations and outcomes studied. We then subjected this literature to an in-depth critique and chose only the most methodologically rigorous research to inform our conclusions about policy effectiveness. Studies with samples focused on families, parents, and children are included in Table 2 (Evidence of Effectiveness). Other studies with broader samples (e.g., all workers, regardless of family status) informed our discussion, but are not included in Table 2. All causal studies considered to date for this review were released on or before March 31, 2021.

Standards of Strong Causal Evidence

When conducting a policy review, we consider only the strongest studies to be part of the evidence base for accurately assessing policy effectiveness. A strong study has a sufficiently large, representative sample, has been subjected to methodologically rigorous analyses, and has a well-executed research design allowing for causal inference—in other words, it demonstrates that changes in the outcome of interest were likely caused by the policy being studied.

The study design considered most reliable for establishing causality is a randomized controlled trial (RCT), an approach in which an intervention is applied to a randomly assigned subset of people. This approach is rare in policy evaluation because policies typically affect entire populations; application of a policy only to a subset of people is ethically and logistically prohibitive under most circumstances. However, when available, RCTs are an integral part of a policy’s evidence base and an invaluable resource for understanding policy effectiveness.

The strongest designs typically used for studying policy impacts are quasi-experimental designs (QEDs) and longitudinal studies with adequate controls for internal validity (for example, using statistical methods to ensure that the policy, rather than some other variable, is the most likely cause of any changes in the outcomes of interest). Our conclusions are informed largely by these types of studies, which employ sophisticated techniques to identify causal relationships between policies and outcomes. Rigorous meta-analyses with sufficient numbers of studies, when available, also inform our conclusions.

Studies That Meet Standards of Strong Causal Evidence

1. Bullinger, L. (2017). The effect of minimum wages on adolescent fertility: A nationwide analysis. American Journal of Public Health, 107(3), 447–452. https://doi.org/10.2105/AJPH.2016.303604
2. Dube, A. (2019). Minimum wages and the distribution of family incomes. American Economic Journal, 11(4), 268–304. https://doi.org/10.1257/app.20170085
3. Godøy, A. & Reich, M. (2021). Are minimum wage effects greater in low-wage areas? Industrial Relations, 60(1), 36-83. https://doi.org/10.1111/irel.12267
4. Jalali, A. (2018). The minimum wage and infant mortality. University of Utah, Department of Economics. https://dx.doi.org/10.2139/ssrn.3308213
5. Komro, K., Livingston, M., Markowitz, S., & Wagenaar, A. (2016). The effect of an increased minimum wage on infant mortality and birth weight. American Journal of Public Health, 106(8), 1514–1516. https://doi.org/10.2105/AJPH.2016.303268
6. Neumark, D. & Wascher, W. (2011). Does a higher minimum wage enhance the effectiveness of the earned income tax credit? Industrial and Labor Relations Review, 64(4), 712–746. https://doi.org/10.1177%2F001979391106400405
7. Raissian, K.M., & Bullinger, L.R. (2017). Money matters: Does the minimum wage affect child maltreatment rates? Children and Youth Services Review, 72, 60–70. https://doi.org/10.1016/j.childyouth.2016.09.033
8. Wehby, G., Dave, D., & Kaestner, R. (2020). Effects of the minimum wage on infant health. Journal of Policy Analysis and Management, 39(2), 411-443. https://doi.org/10.1002/pam.22174
9. Wehby, G., Kaestner, R., Lyu, W., & Dave, D. (2020). Effects of the minimum wage on child health (No. w26691). National Bureau of Economic Research. https://www.nber.org/papers/w26691.pdf
10. Godøy, A., Reich, M., & Allegretto, S. (2019). Parental labor supply: Evidence from minimum wage changes. University of California, Berkeley, Institute for Research on Labor and Employment. https://irle.berkeley.edu/parental-labor-supply-evidence-from-minimum-wage-changes/
11. Averett, S., Smith, J., & Wang, Y. (2020). Minimum wages and the health of immigrants’ children. Applied Economics Letters, 1-8. https://doi.org/10.1080/13504851.2020.1784832 Working Paper: Averett, S., Smith, J., & Wang, Y. (2019). Minimum wages and the health and access to care of immigrants’ children. Institute of Labor Economics Discussion Paper No. 12606. https://www.iza.org/publications/dp/12606/minimum-wages-and-the-health-and-access-to-care-of-immigrants-children
12. DeFina, R. (2008). The impact of state minimum wages on child poverty in female-headed families. Journal of Poverty, 12(2), 155–174. https://doi.org/10.1080/10875540801973542
13. National Academies of Sciences, Engineering, and Medicine. (2019). A roadmap to reducing child poverty. Washington, DC: The National Academies Press. https://doi.org/10.17226/25246.
14. Andrea, S., Messer, L., Marino, M., Goodman, J., & Boone-Heinonen, J. (2020). The tipping point: Could increasing the subminimum wage reduce poverty-related antenatal stressors in US women? Annals of Epidemiology, 45, 47-53. https://doi.org/10.1016/j.annepidem.2020.03.007
15. Andrea, S., Messer, L., Marino, M., Goodman, J., & Boone-Heinonen, J. (2020). A nationwide investigation of the impact of the tipped worker subminimum wage on infant size for gestational age. Preventive Medicine, 133, 1-7. https://doi.org/10.1016/j.ypmed.2020.106016
16. Lenhart, O. (2021). The effects of minimum wages on teenage birth rates. Economics Letters, 198, 1-6. https://doi.org/10.1016/j.econlet.2020.109670
17. Bullinger, L., Raissian, K., & Schneider, W. (Aug. 17, 2020). How does the minimum wage affect child maltreatment and parenting behaviors? An analysis of the mechanisms. SSRN Working Paper. https://dx.doi.org/10.2139/ssrn.3686088

Other References

1. Shonkoff, J., & Phillips, D. (2000). From neurons to neighborhoods: The science of early childhood development. Washington, DC: The National Academies Press. https://doi.org/10.17226/9824
2. United States House Committee on Education and Labor. (2019). Raise the wage fact sheet. https://edlabor.house.gov/imo/media/doc/RAISE%20THE%20WAGE%20ACT%20-%20Fact%20Sheet.pdf
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State Minimum Wage Evidence Review (PDF)

Recommended Citation
Prenatal-to-3 Policy Impact Center. (2021). Prenatal-to-3 policy clearinghouse evidence review: State minimum wage (ER 04B.0821). Child and Family Research Partnership. Lyndon B. Johnson School of Public Affairs, University of Texas at Austin. http://pn3policy.org/policy-clearinghouse/state-minimum-wage

Updated August 2021