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Every month, the Bureau of Labor Statistics releases a report on the employment situation for the previous month. Their release includes data on job growth, unemployment, and wage growth, which gives us a snapshot of the health of the economy and whether it’s working for ordinary Americans.

 

Charting jobs and unemployment

Current Employment Statistics Charts

The Current Employment Statistics (CES) program, also known as the establishment survey, is a monthly survey administered by the Bureau of Labor Statistics (BLS) which provides estimates of employment, hours, and earnings based on payroll records of approximately 131,000 businesses and government agencies.

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Jobs Day - CPI

Current Population Survey Charts

The Current Population Survey (CPS), also known as the household survey, is sponsored jointly by the Census Bureau and the Bureau of Labor Statistics (BLS). Each month, it provides data on the labor force, employment, unemployment, persons not in the labor force, hours of work, earnings, and other demographic and labor force characteristics. 

Jobs Day

Jobs Day

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Economic indicators

Longer-term labor market trends

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Past employment reports

News from EPI › Jobs report shows more than 25 million workers are directly harmed by the COVID labor market: Congress must pass the full $1.9 trillion relief package immediately

March 5, 2021 By Elise Gould Economic Indicators

News from EPI › The U.S. labor market remains 9.9 million jobs below pre-pandemic levels

February 5, 2021 By Elise Gould Economic Indicators

News from EPI › December jobs report provides a clear picture of Trump’s failed handling of the economy

January 8, 2021 By Elise Gould Economic Indicators

News from EPI › Recovery continues to wane: Expiring unemployment relief means more trouble around the corner

December 4, 2020 By Elise Gould Economic Indicators

News from EPI › October jobs report: Next president inherits a devastated economy with millions out of work

November 6, 2020 By Elise Gould Economic Indicators

News from EPI › Slowdown in jobs added means we could be years away from a full recovery

October 2, 2020 By Elise Gould Economic Indicators

News from EPI › Six months into the recession and a 11.5 million jobs deficit remains

September 4, 2020 By Elise Gould Economic Indicators

News from EPI › The bounceback deflates: Job gains slow considerably in July

August 7, 2020 By Elise Gould Economic Indicators

]]> https://www.epi.org/blog/march-job-gains-make-up-for-february-losses-trend-remains-notably-weak/ Fri, 03 Apr 2026 13:10:17 +0000 https://www.epi.org/?post_type=blog&p=319847 Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning. Read the full thread here. 

Today’s jobs report came in stronger than expected with an increase of 178,000 to payroll employment. However, much of the gain was a bounce back to February declines (now a loss of 133,000 jobs). As a result, average monthly growth the last two months was only 22,500 jobs.

#NumbersDay #EconSky

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— Elise Gould (@elisegould.bsky.social) Apr 3, 2026 at 8:41 AM

On the household side, the unemployment rate ticked down slightly to 4.3%. However, it's important to note that this happened for the "wrong" reasons as both the labor force participation and the share of the population with a job also ticked down.
#EconSky

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— Elise Gould (@elisegould.bsky.social) Apr 3, 2026 at 8:51 AM

On the household side, the unemployment rate ticked down slightly to 4.3%. However, it’s important to note that this happened for the “wrong” reasons as both the labor force participation and the share of the population with a job also ticked down.
#EconSky<
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— Elise Gould (@elisegould.bsky.social) Apr 3, 2026 at 8:51 AM

Payroll employment is experiencing large swings month to month, not surprising between February and March given weather and striking workers returning to the job. To get a better sense of the jobs picture, best to look at a smoothed series. Here we see three-month average growth at 68k.
#EconSky

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— Elise Gould (@elisegould.bsky.social) Apr 3, 2026 at 8:51 AM

Overall job gains were 178k in March after a -133k loss in February. Job gains were strongest in health care as striking workers returned to work. Gains also noted in leisure and hospitality as well as construction. Job losses in the federal government as well as financial activities.
#NumbersDay

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— Elise Gould (@elisegould.bsky.social) Apr 3, 2026 at 8:57 AM

Attacks on the federal workforce continue (down 18k jobs in March). Federal employment has shrunk an alarming 352k jobs since Jan 2025. The vital services federal employees provide cannot be done without these essential workers. The cost of these losses are only just beginning.
#EconSky #NumbersDay

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— Elise Gould (@elisegould.bsky.social) Apr 3, 2026 at 9:01 AM

Manufacturing rose 15,000 jobs in March, but still has a huge deficit since Trump took office. Since January 2025, the manufacturing sector has lost 82,000 jobs.

#EconSky #NumbersDay

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— Elise Gould (@elisegould.bsky.social) Apr 3, 2026 at 9:05 AM

Folks, today's jobs report is not good. Avg job growth over the last two months was just 22,500. The March drop in unemp was people leaving the labor force—not finding jobs. Wage growth slowed, esp for nonsupervisory workers.

And the effects of our war in Iran aren’t even in these numbers yet.

— Heidi Shierholz (@hshierholz.bsky.social) Apr 3, 2026 at 9:34 AM

]]> https://www.epi.org/blog/unemployment-has-increased-for-u-s-born-workers-in-the-face-of-mass-deportations-trumps-draconian-immigration-enforcement-is-harming-all-workers/ Fri, 03 Apr 2026 13:03:57 +0000 https://www.epi.org/?post_type=blog&p=319820 During the 2024 campaign, Donald Trump and J.D. Vance promised that mass deportations and a crackdown on immigration would open up jobs for unemployed U.S. citizens. The theory was simple: remove immigrant workers, and native-born U.S. citizens would fill those open positions. Well, the results are in, and the opposite is happening.

The unemployment rate for U.S.-born workers was 4.0% in 2024 under Biden’s administration, and it has risen under Trump. With today’s jobs report, the three-month average for 2026 shows the U.S.-born unemployment rate is at 4.3% (the non-seasonally adjusted average for 2026 is 4.6%).

Claims that mass deportations have helped U.S.-born workers are simply inconsistent with the data. This is no surprise, given that economic research has repeatedly shown that increased immigration enforcement harms everyone in the labor market, including U.S.-born workers. Part of the explanation for this is that immigrants are not only workers, but also consumers, which generates demand and helps the economy grow. Another part is that immigrants and U.S.-born workers complement each other in the labor market. For example, when immigrant roofers and framers disappear, there is less work available for the native-born electricians and plumbers. And when child care workers and cleaners are detained, deported, or terrorized by the Trump administration’s reckless and indiscriminate immigration enforcement, U.S.-born mothers work fewer hours to cover increased care responsibilities at home.

U.S.-born workers are faring worse under Trump’s assault on immigrants–which has included going after not just undocumented immigrants, but also those with green cards, temporary statuses like parole and DACA, and refugees and asylum-seekers. Mass deportations, arrests, detentions, and the stripping of work permits from millions have devastated communities and failed to deliver the promised jobs boom.

]]> https://www.epi.org/blog/voluntary-paid-leave-insurance-is-no-substitute-for-comprehensive-paid-family-and-medical-leave-workers-lose-when-lawmakers-pass-the-buck-to-private-insurers/ Wed, 01 Apr 2026 14:00:58 +0000 https://www.epi.org/?post_type=blog&p=319677

Key takeaways:

• The U.S. is the only OECD country that does not provide a national paid family and medical leave program, leaving it to states to ensure workers are protected when they need to take time off from work to care for themselves or a family member. 
• Some states—including eight across the South—have adopted voluntary private insurance models of paid leave that allow private insurance companies to sell insurance policies directly to employers and/or workers themselves. 
• But this approach provides less coverage, covers fewer workers, widens already large disparities in access, and is likely to be more expensive than comprehensive state paid family and medical leave (PFML) plans. 
• Other states should follow the model of proven success from 13 states and Washington, D.C. that have implemented comprehensive PFML programs. 

Comprehensive, universal Paid Family and Medical Leave (PFML) programs are powerful tools to safeguard and improve the economic well-being and overall health of workers and their families. Research shows that PFML improves health for both mothers and infants, reduces poverty and economic insecurity for low-income families, and increases labor force participation rates for mothers for up to five years after the birth of their child. In states that do not have a PFML program, workers lose an estimated $34.3 billion annually in wages due to leave-related absences from work, including $18.8 billion lost by women. 

PFML programs also benefit employers and the broader economy, in part by improving recruitment of talented workers, especially among small businesses, reducing turnover, and increasing worker productivity. The National Partnership for Women and Families estimates that U.S. women’s lower labor force participation—due in part to a lack of paid leave—has cost the broader U.S. economy more than $6.7 trillion in economic activity over the last decade. This is economic activity the U.S. economy would have experienced if American women’s labor force participation rates were the same as those of women in Canada.

Despite PFML’s clear benefits, the U.S. is the only OECD country that does not provide a national paid family and medical leave program—leaving it to states to ensure workers are protected when they need to take time off from work to care for themselves or a family member. 

Lawmakers in 13 states and D.C. have met this responsibility by passing comprehensive paid family and medical leave programs that guarantee coverage. Lawmakers in 10 other states have chosen weaker, much less effective voluntary approaches that defer to employers, leaving many workers uncovered. Vermont and New Hampshire, for example, have implemented public-private voluntary paid leave models where the state contracts with private insurance companies to provide paid leave for public-sector workers and private-sector employers may opt in voluntarily.1 

Across the South, Alabama (2023), Arkansas (2023), Florida (2023), Kentucky (2024), South Carolina (2024), Tennessee (2023), Texas (2023), and Virginia (2022) have adopted voluntary private insurance models of paid leave that allow private insurance companies to sell insurance policies directly to employers and/or workers themselves. 

While the private insurance model has been embraced by the insurance industry—the National Conference of Insurance Legislators adopted a voluntary paid family leave model bill in 2022 at its annual meeting—it fails workers and families. Not only do these programs fail to require employers to provide any coverage to their workforce, but the relevant laws in these states also typically provide few, if any, requirements for what types of leave are covered, the duration of coverage, or wage replacement rates.

This approach to paid family and medical leave provides less coverage, provides it for fewer workers, increases already large disparities in access, and is likely to be more expensive than comprehensive state PFML plans. 

Less coverage 

State PFML programs typically provide workers with 8–12 weeks of paid, job-protected leave to bond with a new child (birth, adoption, or foster), to care for themselves or a family member with a serious illness or injury, or for military caregiving and exigency leave. Wage replacement rates are typically at 90% or higher, at least for low-wage workers, in most states with a paid leave program, including California, Colorado, Connecticut, Minnesota, Oregon, Washington, and the District of Columbia. Maine and Maryland will also pay out at this rate when they begin paying benefits later in 2026. 

Because voluntary models do not require employers to provide coverage for their workers, there is no guarantee that they will. And when employers do purchase paid leave insurance for their workforce, they are unlikely to provide the same level of coverage as comprehensive state programs. The amount of leave provided, the wage replacement rate, and even what life events are covered depend on the employer and/or the insurance company. The New Hampshire plan, which does provide details on requirements for paid leave coverage, only requires 6 weeks of paid leave with wage replacement of just 60%. 

Finally, in direct contrast to comprehensive, universal state paid leave programs, it is unclear how voluntary insurance models of paid leave could provide a job guarantee for workers taking paid leave. In the public-private model offered in New Hampshire, workers are not provided with job protection but may qualify for protection under the federal Family and Medical Leave Act (FMLA), so long as they meet the requirements of FMLA (i.e., they must work at a firm with 50+ employees, and must have worked for the employer for 1,250 hours over the preceding 12 months). 

Covering fewer workers

An estimated 46.2 million workers—almost one-third (32%) of the private-sector workforce in the U.S.—are eligible for coverage under one of the 14 PFML programs in the country. That leaves tens of millions of workers without a guarantee of paid time off when they need to provide for their family’s needs. This reflects, in large part, the lack of a federal universal, comprehensive PFML program and the failure of most states to implement such a plan. Unfortunately, when participation is voluntary, many employers are unlikely to offer this benefit to their workers. 

For example, in the New Hampshire voluntary program, public-sector workers are automatically covered, and private employers and individual workers can voluntarily participate. After three years, just 2.3% of private-sector workers are covered by this PFML plan through their employer. And in the eight states that authorize private insurance paid leave, researchers are unable to determine whether employers are actually purchasing insurance coverage for their workers, but it appears that few insurance companies are even selling policies in these states. It is therefore not surprising that fewer than 1 in 4 workers are covered by PFML through their employer in most of these states, including Alabama, Arkansas, Florida, South Carolina, and Tennessee. In contrast, the 14 state PFML programs cover 93% of all workers in their jurisdictions. 

Increasing disparities

It is not just that fewer workers are covered by voluntary paid leave models, but coverage rates vary dramatically by income, occupation, race and ethnicity, and other characteristics. According to the Department of Labor, 95% of the lowest-wage workers—mostly women and workers of color—lack access to paid family leave. Many of these workers are in occupations with low access to paid leave, including jobs in leisure and hospitality (8%), accommodation and food service (7%), and transportation and warehouse work (9%). 

American Indian/Alaska Native (18%) and Black (23%) workers have some of the lowest PFML coverage, while Asian American, Native Hawaiian, and Pacific Islander (55%) and Hispanic (41%) workers have some of the highest coverage rates. Racial differences reflect, in part, differences in where workers live. For example, more than half of the Black population lives in one of the 16 Southern states or the District of Columbia, where only two states and D.C. have a state paid leave program.

Higher costs

In states where PFML is voluntary, there is little transparency, especially related to costs. We know from the private health insurance model, however, that introducing a profit motive into the provision of care is a terrible way for policymakers to provide workers with the protection they need at affordable costs. A profit-seeking insurance company is going to look for ways to reduce its costs and maximize profits; this inevitably means seeking to reduce payouts, whether through claim denials or other means. There is no scenario in which the profit-seeking model results in both high-quality, comprehensive leave coverage and low costs for workers, employers, or the public. 

In New Hampshire, for example, only one insurance company bid for a contract to provide paid leave benefits, and its estimated rates were generally higher than the payroll contributions in states with PFML programs. 

Further, an insurance industry stakeholder expressed concern about the lack of incentives for private employers to participate in these plans. In both the New Hampshire and Vermont cases, they reported that the models were unsustainable because most employers did not participate in the plans and individual workers whose costs are capped by the state plans would only participate when they anticipated needing coverage—meaning that the insurance pools would never be adequately financed. 

A better model exists

In recent years, challenges facing workers with care responsibilities have rightfully garnered greater public attention, especially in the wake of the COVID-19 pandemic. Many policymakers have taken notice. Unfortunately, in some states—frequently those that have long opposed strong worker protections, a robust safety net, and workplace regulations—lawmakers have opted for voluntary models of paid family and medical leave that are fundamentally flawed. 

Voluntary models allow businesses to decide whether their workers should be paid when they need to take time to care for themselves or their families. Without mandatory coverage, too many workers will not have access to the leave they need, and this is especially the case for those workers who need paid leave the most. 

Instead, we should follow the model of proven success from 13 states and D.C. that have implemented comprehensive PFML programs, including some that have improved programs over time, incorporating lessons and best practices from other states. These programs provide more inclusive coverage for personal illness or injury, bonding with a child, caring for an ill or injured family member, and military deployment.

Universal programs also provide coverage for more workers, including employees, both full- and part-time, both public- and private-sector workers, and in some cases, independent contractors are allowed to opt in. The best programs provide workers with 12 weeks of job-protected leave—i.e., workers are guaranteed their same job or a substantially similar job with comparable pay and benefits when they return from leave and have wage replacement rates of at least 80% of the state median and 100% for low-wage workers. 

These programs have been proven to expand access at a reasonable cost and with a broad range of benefits for workers, businesses, and states overall.

These are benefits that voluntary private insurance models have failed to provide in part because the goal of private insurance is to make a profit, not to ensure the overall well-being of workers and families or their communities. 

---

1. Lawmakers in New Hampshire introduced a new bill in February 2026 that will extend paid family leave to a full comprehensive state paid leave program, if it is enacted.

]]> https://www.epi.org/blog/more-than-350000-oklahoma-workers-will-get-a-raise-if-voters-approve-a-15-minimum-wage-this-summer/ Mon, 30 Mar 2026 16:48:55 +0000 https://www.epi.org/?post_type=blog&p=319424 This June, Oklahoma voters will have the opportunity to pass a historic minimum wage ballot initiative that would boost workers’ wages at a time when many are struggling with growing affordability challenges. State Question (SQ) 832 proposes gradually increasing the minimum wage from $7.25 to $15.00 an hour by 2029 (Table 1). Our analysis finds that this policy would raise wages for 357,700 Oklahoma workers—or roughly one-fifth (20.3%) of the state’s wage-earning workforce—by more than $783 million overall. This total includes both workers who would directly and indirectly see wage increases from the policy. On average, affected workers would gain $2,322 in annual pay if they worked full time and year-round.

Table 1

The benefits of raising the minimum wage

Raising the minimum wage is a research-backed policy that increases earnings for low-wage workers without causing increases in unemployment or other negative economic side effects. A strong wage floor is also a powerful tool for making a more equitable economy. Almost two-thirds of the workers who would be affected by SQ 832 are women (63.3%). The policy would also disproportionately benefit workers of color. Hispanic workers make up 18.2% of the affected workers, compared with 11.0% of the total Oklahoma workforce. Black workers would be 10.6% of affected workers, while only making up 7.1% of the workforce (see Table 3).

The policy would also provide critical support to workers experiencing significant economic insecurity. Nearly three-fifths (59.3%) of the affected workers have incomes below 200% of the poverty line. Research shows that raising the minimum wage significantly reduces poverty, even as higher wages simultaneously reduce some workers’ and families’ eligibility for, and reliance on, public assistance programs.

A higher minimum wage would help combat the affordability crisis

While dozens of states and cities have passed minimum wage increases over the past 15 years, Oklahoma is one of 20 states that still uses the dismally low federal minimum wage of $7.25 an hour. Policymakers have not raised the federal minimum wage since July 2009, meaning that as prices throughout the economy have risen, the buying power of a paycheck at the federal minimum wage has fallen—substantially. Adjusting for inflation, the federal minimum wage is worth 30% less than it was in 2009. In fact, since 2025, the federal minimum wage has officially been a poverty-level wage under the Department of Health and Human Services’ guidelines. The stagnant federal minimum wage is one example of how economic policy in recent decades has suppressed workers’ wage growth, squeezing them as prices have continued to rise and creating the affordability crisis.

Fortunately, SQ 832 would not only raise the state minimum wage to more adequate levels, but also automatically adjust it for inflation beginning in 2030. Twenty-one states already use these automatic increases to ensure that low-wage workers don’t lose ground over time as prices rise.

SQ 832 would go a long way toward improving conditions for the lowest-paid workers in the state as they contend with rising housing, energy, and health insurance costs. However, the reality is that most Oklahoma workers face higher living costs than can be supported by a $15-per-hour wage. Figure A shows estimates of a living wage for a single adult in different Oklahoma metro areas using EPI’s Family Budget Calculator. All Oklahoma metro areas have living wages above $16 an hour. Workers in Tulsa, Oklahoma City, and Lincoln County must earn at least $18 an hour to meet the Family Budget Calculator threshold. Even the lowest-cost county in the state (McIntosh County, not shown) has a living wage greater than $15 an hour.

Figure A

SQ 832’s $15 target would help hundreds of thousands of Oklahoma workers earn closer to a living wage and put Oklahoma’s wage standards more in line with many other states. As of January 2026, 17 states and the District of Columbia had at least a $15 minimum wage—including states such as Arizona, Missouri, and Nebraska.

Lawmakers and voters in many states have adopted higher state and local minimum wages both in response to federal inaction and because economic research has reached a strong consensus that raising the minimum wage, at least to levels attempted thus far, has not caused any measurable harm to employment.  

A $15 minimum wage in Oklahoma is not an outlier compared with policies in other states, even after accounting for differences in the labor markets of different jurisdictions. Economists use the minimum-to-median wage ratio (sometimes called the Kaitz index) to assess the “bite” or strength of the wage floor relative to wage levels in the area where the policy is taking place. This measure allows us to see how a $15 minimum wage compares in New York and Oklahoma, where the overall distribution of wages is substantially different. Most minimum wage research has studied policies with minimum-to-median wage ratios of .67 or less (i.e., a minimum wage raised as high as two-thirds the median wage in the same jurisdiction.) Table 2 shows the current and projected path of Oklahoma’s minimum-to-median wage ratio if SB 832 passes. The ratio would grow as the policy goes into effect, but it would likely never exceed 60%—meaning it is solidly in the range of policies that economists have studied and found no negative effect on employment.

Table 2

Oklahoma’s current minimum wage suppresses pay for workers

Establishing and periodically raising a strong wage floor is necessary to counteract employers’ excess market power over workers, which keeps wages lower than they would be in a truly competitive market. Workers face a multitude of barriers which provide wage-setting leverage for employers. Workers often have limited information about wages and work policies at alternative employers and can be constrained in their job choices by limited transportation options or the need to maintain specific schedules for child care and other family needs. Low-wage workers typically have less financial ability than higher-wage workers to overcome these obstacles, and are more likely to encounter take-it-or-leave-it wage offers that prevent them from negotiating pay. These challenges (sometimes called “frictions”) add up, providing leverage for employers to pay lower wages than workers need—and lower than what is optimal for the local economy.

Oklahoma’s weak wage floor suppresses pay for hundreds of thousands of workers. The state has the third-highest share of workers earning less than $15 an hour (21%). Although there are relatively few workers who earn exactly $7.25 an hour, one undervalued benefit of a strong wage floor is that it supplies upwards pressure on the wages of low-wage workers who earn more than the minimum wage. These “spillover effects” mean that workers above the new minimum wage threshold also see wage increases as employers adjust other workers’ pay to maintain wage ladders and preserve seniority.

Oklahomans have a consequential opportunity to strengthen the wage floor and deliver a meaningful raise to hundreds of thousands of workers. A $15 minimum wage is evidence-backed, both by rigorous economic research and the recent experience of many other states. SQ 832 would support families as they struggle with the affordability crisis and generate lasting improvements to the health and equity of the economy.

Table 3

]]> https://www.epi.org/careers/development-director/ Fri, 27 Mar 2026 19:24:15 +0000 https://www.epi.org/?post_type=career-posting&p=319593 Apply now!

About Economic Policy Institute (EPI)  

The Economic Policy Institute (EPI) is a nonpartisan nonprofit that uses rigorous economic research and analysis to advance policies that promote a fair and just economy where workers thrive, power is shared equitably, and structural racism and gender inequities are dismantled. EPI’s research influences national, state, and local economic policy debates and is widely cited in the media.   

Job Title: Development Director 

The Development Director will lead EPI’s fundraising strategy and operations, deepen and expand philanthropic support, and bring outstanding organizational and process-management skills to ensure fundraising systems, timelines, and workflows are effective, disciplined, and scalable. This is a senior leadership role that will collaborate across departments to build a sustainable, diversified revenue base for EPI’s mission-driven work.

The Development Director supervises two staff— the Associate Director of Development and the Senior Development Associate—and is a part of the senior management team, reporting to the Executive Vice President. 

This position is in our Washington, DC office and is on a hybrid schedule with in-person work at least two days per week (currently Tuesday and Wednesday). 

What You Will Do 

The main responsibilities of the Development Director: 

Fundraising Strategy & Leadership 

• Develop and implement a comprehensive development strategy and annual work plan to meet revenue goals.  
• Equip senior leaders with timely tools, well-researched briefings, and accurate analysis for effective donor conversations. 
• Partner with the President, Executive Vice President, and senior leadership to align fundraising priorities with organizational strategy. 

Donor Cultivation, Solicitation & Stewardship 

• Identify, cultivate, solicit, and steward new and existing donors including foundations, high-net-worth individuals, small dollar donors, and unions.  
• Oversee stewardship plans that strengthen donor loyalty and long-term support. 

Grant Writing & Management 

• Lead proposal development, submissions, and reporting to institutional funders.  
• Ensure timely acknowledgment of awards, compliance with funder requirements, and high-quality impact reporting. 
• Work closely with EPI’s Finance team to ensure grant tracking and management is aligned and accurate. 

Support Board Engagement on Fundraising 

• Support EPI’s President in engaging and informing the Board on development, fundraising goals, pipeline health, and stewardship strategies.  
• Communications & External Representation 
• Work closely with communications staff to craft compelling fundraising collateral, impact reports, donor stories, and case statements.  
• Represent EPI at events, meetings, and in networks that advance visibility and fundraising outcomes. 

Team Management & Infrastructure 

• Design, implement, and continuously improve development systems, processes, and workflows to support efficient fundraising operations, strong coordination across teams, and clear accountability. 
• Ensure high standards of organization, documentation, and project management across proposals, donor engagement, reporting, and stewardship. 
• Provide ongoing guidance and motivation to the development team and provide oversight to consultants as needed.
• Evaluate the development team’s performance and provide opportunities for personal and professional growth at varying points in their career trajectories. 

Who You Are 

Desired qualities and experience: 

Proficiency in: 

• Demonstrated success in securing and stewarding institutional donors.  

• Excellent verbal and written communication skills, including proposal and case statement writing. 

• Outstanding organizational, process-management, and project-management skills, with demonstrated ability to manage complex fundraising pipelines, deadlines, and cross-departmental collaboration. 

• Strong attention to detail alongside the ability to prioritize, plan, and execute multiple workstreams simultaneously 

• Commitment to EPI’s mission of economic justice, equity, and policy impact 

• Knowledge of national philanthropic landscape and funder priorities in economic justice, labor, and equity.  

• Familiarity with donor CRM platforms (e.g., Raiser’s Edge).  

• Experience supporting senior leadership in fundraising roles.  

• A spirit of curiosity and a commitment to continuous learning that supports a deep understanding of EPI’s research, policy priorities, and organizational strategy. While program staff and senior leadership typically lead funder briefings, the successful candidate will develop the insight and institutional knowledge needed to identify strategic fundraising opportunities, shape compelling cases for support, and design proactive fundraising strategies aligned with EPI’s priorities. 

Experience: Minimum 7–10+ years of nonprofit fundraising experience with a strong track record of meeting and exceeding revenue goals. 

EPI is a unionized workplace with the Nonprofit Professional Employees Union (NPEU). 

This position is not in the bargaining unit and reports to the Executive Vice President.  

The Development Director supervises unionized staff— the Associate Director of Development and the Senior Development Associate—and is a part of the senior management team.  

Compensation & Benefits 

The salary for this position ranges from $145,000-$175,000, dependent on experience, plus benefits.   

EPI offers an excellent benefits package, including generous paid time off, a 9.25% employer-provided 401k retirement contribution, partial tuition reimbursement, twelve weeks of parental leave, and fully employer-funded medical, vision, dental, short- and long-term disability, and life insurance for individual employees.  

As a condition of employment, EPI requires all staff to provide proof of COVID-19 vaccination which meets the guidelines as defined by D.C. Health. 

To Apply 

Submit your resume and a thoughtful cover letter detailing your experience designing and implementing comprehensive fundraising strategies. In particular, please focus on highlighting your work with institutional giving, annual campaigns, small donor contributors, events, and planned giving. Please provide a sample fundraising success story or summary of a major proposal you led. Applications will be reviewed on a rolling basis. 

EPI believes that having a diverse and inclusive workplace not only strengthens the institute’s work but is also essential for understanding and creating economic policies that support all working people. We encourage applicants who bring lived experience and nontraditional backgrounds to apply to our positions. 

EPI is an equal opportunity, fair chance, affirmative action employer, committed to building a diverse and inclusive workforce. All qualified applicants will be considered for employment without regard to race, color, creed, national origin, sex, age, disability, marital status, sexual orientation, military status, prior history of arrest or conviction, citizenship status, caregiver status, or other categories protected by law.  

Apply now!

]]> https://www.epi.org/publication/how-arpa-state-and-local-fiscal-recovery-funds-helped-ensure-a-swift-post-covid-recovery/ Tue, 24 Mar 2026 12:00:19 +0000 https://www.epi.org/?post_type=publication&p=319224

Key takeaways

The American Rescue Plan Act (ARPA), signed into law by President Biden in 2021, included $350 billion for states, cities, counties, territories, and tribal governments. These State and Local Fiscal Recovery Funds (SLFRF) went directly to each government to spend on public health, economic recovery, infrastructure, and more.  

SLFRF was an ambitious and successful program that should serve as a model during future economic downturns. Among the key findings of this report: 

• The most important policy choice was giving wide flexibility to state and local governments in how to use the funds. This allowed governments to spend the funds in ways that best met their needs. 

• Fiscal recovery funds helped keep the COVID-19 recession from getting worse, and helped state and local governments recover substantially faster than they did after the Great Recession. 

• Governments in Southern states were far more likely than others to use the funds for infrastructure work to help combat decades of underinvestment in basic public services across the South. 
• SLFRF supported public services without contributing to inflation. 

The American Rescue Plan Act (ARPA) was enacted on March 11, 2021. Among other provisions, ARPA allocated $350 billion for State and Local Fiscal Recovery Funds (SLFRF). SLFRF was a recognition of the stark reality that the COVID-19 pandemic had wreaked havoc on state and local government finances (McNicholas, Bivens, and Shierholz 2020). SLFRF was also a reflection of lessons that policymakers learned from recent history. In the years following the Great Recession, inadequate fiscal support to state and local governments resulted in massive budget cuts, public-sector job losses, and reduced spending that dragged on the economy, delaying economic recovery by years (Shierholz and Bivens 2013). With the prospect of potentially devastating COVID-19-induced state and local budget shortfalls, Congress and the Biden administration made the decision to spend at the scale of the problem by making sure SLFRF was large enough to meet its recipients’ needs.

Of the $350 billion in fiscal recovery funds, $195.3 billion went to state governments, $65.1 billion to counties, $45.6 million to cities, $20 billion to tribal governments, $4.5 billion to territories, and $19.5 to small units of local government, mostly towns and villages. They could use the funds for five purposes: responding to the public health emergency caused by COVID-19; responding to the negative economic impacts of COVID-19; providing premium pay to “essential” workers; improving water, sewer, and broadband infrastructure; and replacing public-sector revenue lost by the economic downturn that accompanied COVID-19. Recipient governments had until December 31, 2024, to obligate those funds and until December 31, 2026, to spend them.

By any objective assessment, SLFRF was a transformative success. It averted a potential crisis. It empowered state and local leaders to address long-standing community needs. It helped millions of working families. It saved lives during the COVID-19 pandemic. The design and implementation of SLFRF offer many important lessons to future policymakers.

This report will highlight the smart design of SLFRF, which made it well positioned to address the needs of state and local governments in 2021 and beyond. The report will also note ways in which future policymakers could improve upon SLFRF’s design. The report will describe how SLFRF funds were deployed, showcasing the breadth and variety of uses to which they were put. State and local fiscal recovery funds were a vital part of the U.S. economic recovery post-2020. They provide a shining example of what government can achieve when it has adequate resources, and when the needs of communities and families are the main drivers of investment decisions.

SLFRF played a vital role in preventing a second Great Recession

The pandemic recession that began so suddenly in March 2020 was the biggest economic shock the country has seen since the Great Recession that started in 2008. Comparing the distinctly different policy responses to those two crises demonstrates how important SLFRF was to speeding the economic recovery and to preventing a second Great Recession.

First, SLFRF was vital in preserving and rebuilding the public-sector workforce. In the wake of the Great Recession, state and local governments faced devastating budget cuts that resulted in significant reductions in staffing and services. All faced fiscal crises because of sharp revenue declines caused by the Great Recession, but public services were further strained in many states by deliberate policy decisions, predominantly by Republican-controlled state governments, to cut taxes and slash public services (Cooper, Gable, and Austin 2012). State and local government employment peaked in July 2008, then fell for five straight years. It took a total of 11 years to reach July 2008 levels again (Cooper 2020). By contrast, the peak in state and local governments jobs before the pandemic was in February 2020. By October 2023—just three years and eight months later—state and local public sector employment had fully recovered to pre-pandemic levels.

In the first year following the passage of ARPA, there is evidence that the pace of a state’s SLFRF spending was positively correlated to the recovery of its public workforce:

Table 1

After that, the direct correlation between SLFRF spending and public-sector jobs faded, but that is hardly surprising, given all the other variables that impact job markets.

Second, this rapid recovery mirrored the recovery of the overall job market. The typical U.S. state needed 77 months after the start of the Great Recession for its job numbers to recover; it only took 29 months after the beginning of the COVID-19 pandemic for the same level of recovery. Of course, SLFRF was hardly the biggest factor in the overall economic recovery, but Cooper (2020) has shown that disinvestment in the public sector drags on growth in the private sector as well, and on economic growth overall. SLFRF supported conditions that made the private-sector economic recovery possible.

Third, SLFRF allowed states and localities to enact programs of social insurance and income support that directly responded to immediate community needs. In just the first two years of SLFRF’s operation alone, more than 4.5 million households received mortgage, rent, or utility assistance. Emergency programs offered housing to people who had been displaced by the pandemic and direct government assistance to food pantries and other programs that helped people facing food insecurity. These programs were valuable tools for helping working families in need.

Fourth, SLFRF has helped state and local governments and communities become more resilient against future downturns. Many states upgraded their unemployment insurance (UI) systems to make it easier to cope with an influx of claimants in the future. Some local governments created greater tenant protections and used recovery funds to give tenants facing eviction the right to free legal counsel. Several cities invested in pre-apprenticeship programs to help people in underserved communities gain access to high-quality infrastructure and climate jobs. These investments and others like them will help state and local governments to quickly distribute social insurance benefits when the next crisis hits and provide additional safety for working families put in jeopardy through job loss, illnesses, or natural disasters. (Kamper 2025).

SLFRF’s innovative program design meant funds could be used where they did the most good

The SLFRF program had two unusual characteristics that helped make it successful.

First, unlike previous iterations of state and local aid, SLFRF funds went directly to individual state and local governments. While payments to smaller cities were distributed first to states and then passed on to those cities, states were prohibited from imposing conditions on that distribution and could not hold back the payments; their role was purely administrative.

On previous occasions when federal money was allocated to local governments, it was much more common for the state government to hold federal aid on behalf of local governments. This was, for example, the mechanism behind the COVID-19-era financial assistance to school districts: the Elementary and Secondary Schools Emergency Relief Fund (ESSER, which had three iterations in 2020 and 2021, called ESSER I, ESSER II, and ESSER III respectively). A state’s department of education held ESSER funds and only parceled them out to school districts after the district had made a qualifying expenditure. The districts were not free to spend ESSER funds on their own. With SLFRF, however, recipients received funds before they needed to make expenditures and had complete control over how to use them.

This leads to a second important characteristic of SLFRF: Recipients were given broad latitude in how to use their funds. Under the legislation and the rules put out by the U.S. Department of the Treasury, SLFRF could be used for:

1. responding to the public health emergency caused by COVID-19
2. responding to the negative economic impacts of COVID-19
3. providing premium pay to “essential” workers
4. improving water, sewer, and broadband infrastructure
5. replacing public-sector revenue lost by the economic downturn that accompanied COVID-19

In 2023, the eligible uses for local governments were broadened to include government-built (or renovated) housing, surface transportation projects, and natural disaster relief, though in the end only a small share of recovery funds was used for those purposes.

Treasury rules also made the process simpler for smaller local governments by allowing up to $10 million to be used as public-sector revenue replacement without having to account for specific losses of funding—the SLFRF equivalent of the standard deduction on one’s taxes. Those rules also made clear that “negative economic impacts” could include existing inequities that predated the pandemic, such as long-standing racial employment and wage gaps (Economic Policy Institute 2025).

The combination of these two characteristics—state and local governments had the money within their control before making spending decisions, and great latitude in how to use it—meant that recipients could tailor the focus and pace of SLFRF spending to meet particular local needs. Given the extremely fluid state of the pandemic and the economy when ARPA was passed, this was the right decision to meet the pressing needs of the COVID-19 crisis. Overly prescriptive rules or additional bureaucratic hurdles to accessing and disbursing funds would have made it much harder for state and local recipients to respond rapidly to their specific needs.1

Lessons to apply for future policy design

Despite the great freedom given to recipients to use SLFRF in ways that best met their needs, of the roughly 31,000 local government recipients, almost 600 local government recipients did not report using their fiscal recovery funds at all and a further 600 reported using less than 99%. Another 220 local governments failed to file a single report on their use of fiscal recovery funds, and 1,089 more have been delinquent in filing for at least a year.

At least part of the explanation is that while ARPA guidance allowed for fiscal recovery funds to be used for myriad reasons, recipients (especially smaller local governments) with little experience in receiving money directly from the federal government often struggled to understand Treasury rules on allowed uses of funds. Unlike state governments with experienced personnel deeply versed in Treasury’s complex rules and how to navigate them, many local governments had no such in-house expertise. Advocacy organizations reported, again and again, that even in 2024, as the deadline to obligate ARPA funds was approaching, many local policymakers were still raising questions about how funds could be used and what was allowed (Rochford, Bauer, and Wallace 2024).

Relatedly, Treasury officials who talked with EPI noted that many of the smallest local governments did not have a website or internal email system. Because all SLFRF reporting was supposed to be done electronically, some of these recipients struggled to properly report their expenditures. Sometimes the departure of a single municipal official created significant problems because that person was the only one who knew the electronic passwords.

An abundance of reports from across the country make clear recipients struggled to choose from among many appealing options, creating a kind of paralysis of choice. This is completely understandable; the needs communities were facing at this time were myriad and diverse, and prior to SLFRF, most local government officials had likely never had access to such flexible resources before then.

These challenges were exacerbated because the Treasury Department made a conscious decision not to offer specific technical assistance regarding recipient governments’ possible uses of fiscal recovery funds. When local government officials reached out to Treasury to seek guidance on whether a particular idea was within the scope of the law, Treasury rarely offered definitive answers. This was understandable given that more than 31,000 governmental units received their own fiscal recovery funds; Treasury could not possibly handle detailed queries from more than a fraction of them. What this meant, though, is that many opportunities to use fiscal recovery funds in innovative and imaginative ways were missed. Many local governments chose caution over ambition, out of fear that particular uses of the funds would not be permitted and the funds rescinded.

To prevent a similar situation in the future, policy designers might do well to study Colorado’s Regional Grant Navigator program. Colorado chose 13 community and nonprofit organizations across the state to help local governments find ways to best access funds from the 2021 Infrastructure, Investment and Jobs Act and the 2022 Inflation Reduction Act. These navigators helped local governments understand the complex regulations around the laws, helped them design proposals to apply for funding, and offered advice on which programs might be best suited to the needs of those communities (Colorado n.d.). A similar model might allow local governments to get unbiased and timely assistance from organizations committed to helping them make the most of their funds.

A final challenge of the SLFRF policy design was the lack of clear definition of what “obligating” the funds meant. As advocates, policymakers, and others reported throughout 2022, 2023, and 2024, many local governments understood “obligation” to mean something similar to “budgeting” or “allocating”—making a formal decision as to how to use the funds (Kamper 2024). Recipients unfamiliar with the language used by Treasury could and did make that mistake. It was not until May of 2024 that Treasury explicitly stated in a webinar that “obligating” funds is not the same thing as budgeting (Treasury 2024). “Obligation” required not just a budgetary decision, but concrete steps to implement the decision, such as signing a contract with a vendor or an interagency agreement to send the funds to a particular department. Future fiscal recovery efforts should be more conscious of the need to clearly define terms, especially when plain-language definitions may not match Treasury’s technical definition.

How were fiscal recovery funds used?

General spending trends

The primary use of fiscal recovery funds—approximately 50% of state allocations and 60% of local government allocations—was revenue replacement, (replacing state and local funds that were lost because the economic shock of COVID-19 reduced tax and fee revenues). Revenue replacement had not been an allowed use of previous iterations of COVID-19 fiscal relief funds. Most notably the CARES Act, the first COVID-19 relief measure passed in 2020, did not allow use of Coronavirus Relief Funds for revenue replacement.

State and local governments face considerable constraints on their ability to raise revenues. Measures like Colorado’s Taxpayer Bill of Rights and California’s Proposition 13 often prohibit states from raising taxes or require legislative supermajorities to do so (Jefferson 2025). Local governments face even more constraints, with few policy levers available to raise revenues. As such, any shock to state and local government revenues can take a long time to reverse, a lesson we learned in the aftermath of the Great Recession. By allowing revenue replacement, SLFRF made it much easier for state and local governments to maintain adequate levels of funding, even as the pandemic recession lowered income from taxes. Revenue replacement was an important innovation in ARPA that should be replicated in the future.

Although the interim rules for ARPA put out by Treasury soon after the law was enacted required complex accounting of lost revenue, the final Treasury rule made the process much easier. For amounts less than $10 million, recipients did not need to calculate lost revenue. They could simply designate funds as revenue replacement and use them as needed. The appeal of this rule to local governments is evident in data summarizing subsequent uses of SLFRF; the smaller a recipient government, the more likely they were to use their fiscal recovery funds for revenue replacement.

Table 2

After revenue replacement, the next most popular use of SLFRF was addressing negative economic impacts of the pandemic. Once again, the flexibility given to recipients under this category was almost certainly a key factor encouraging use of funds for such purposes.

Table 3

Infrastructure was the third-largest use of fiscal recovery funds, and here there is a notable regional variation—state and local governments in the South allocated a far greater share of their funds to infrastructure than those in the rest of the country. In particular, 82% of all state funds obligated for broadband were in Southern states (not shown in Figure A).

Figure A

Not only is water and sewer infrastructure essential for people’s health, these investments are vital to a well-functioning economy. As EPI has extensively documented in its Rooted in Racism series, Southern states have long underinvested in in basic physical infrastructure (Childers 2023–2025). These spending choices likely reflect, at least in part, a need to address the long-standing underinvestment in the region—underinvestment driven by Southern lawmakers’ antipathy toward raising adequate revenue.

Aside from infrastructure spending in the South, there are no clear regional trends in how fiscal recovery funds were used. This is not surprising, given the flexibility of the funding (a feature EPI has long supported) (Bivens 2020). When ARPA was enacted in early 2021, there was simply no way for the federal government, or state and local governments, to know what their needs would be. ARPA’s flexibility was the right decision. The ability of recipient governments to immediately fill unanticipated budget holes via revenue replacement meant hundreds of thousands of state and local jobs were preserved, vital public programs were maintained, and a deeper economic crisis averted. The most notable success of ARPA SLFRF lies in what did not happen: a collapse in basic public services, massive long-term unemployment, and an extended economic depression.

Innovative SLFRF investments supported working families

In all, SLFRF funded more than 159,000 different projects across the country. Some were gigantic, like a $787 million program in New Jersey to provide rental assistance to low- and moderate-income tenants, and some were very small, like the $28 that St. Clair County, Michigan, provided to help renovate the Port Huron Township Museum.

There are many examples of state and local governments using fiscal recovery funds to make transformative investments to build an economy that supports working families. Several types of uses deserve special attention: fighting the COVID-19 pandemic, investing in public health, and addressing problems with food access and nutrition.

First, ARPA SLFRF went a long way to address the health emergency the country faced in 2021. States, cities, and counties were on the front lines of keeping people safe, providing access to new vaccines once they became available, and saving lives throughout the COVID-19 pandemic.

Over $1.8 billion in SLFRF was used to test, trace, and vaccinate people against COVID-19. Much of this money was used to deal with the practical and logistical challenges of testing and vaccination. Cities and counties, especially, bought personal protective equipment for government employees, especially first responders. Scores of governments purchased testing kits and lab equipment and worked to engage the public to encourage vaccination and tracing outbreaks. For example, Milan, Illinois, rented a meeting hall in town for $43,200 to host their vaccine clinic. Jefferson County, Missouri, hired a nurse for every public school district to oversee a contact-tracing program to track COVID-19’s progress through schools. Monroe County, Indiana, was one of many governments that instituted wastewater monitoring to check for COVID-19 surges While any individual expenditure may seem minor, together these measures did much to reduce COVID-19 infections and deaths.

Second, SLFRF allowed recipient governments to make long-term upgrades to infrastructure that both mitigated COVID-19 threats and made public spaces permanently safer, healthier, and more accessible. Almost $4.3 billion was obligated to upgrade the air quality and safety of public and private facilities. At least 550 projects upgraded HVAC systems in schools, nursing homes, public buildings, and correctional facilities. Governments invested in digital communications tools to reduce the need for in-person meetings. Typical examples include Peoria, Arizona, which allocated $124,996 to install touchless drinking fountains in public buildings, and Stafford County, Virginia, which spent $115,255 to add a glass partition to the entrance of the Commissioner of Revenue’s office so that the administrative staff could be protected from visitors’ virus transmission.

The freedom given to local governments to innovate was particularly evident in the way multiple localities sought to address problems related to food access and nutrition—an issue that has received tremendous public attention resulting from New York City Mayor Zohran Mamdani’s plan to establish municipally operated grocery stores. While one commentator claimed such a project would resemble “the old Soviet Union” (McArdle 2025), the fact is that many SLFRF recipients used public funds to increase access to food for low-income communities, including by opening their own stores.

For example:

• Sioux Falls, South Dakota, set up a mobile grocery market that would operate in underserved parts of the city.
• The small town of Cutler, Illinois, set up a Community Commissary to make it easier to buy food without having to travel a long way.
• Branson, Colorado (population 74 in the 2010 census), constructed a community greenhouse to grow and sell fresh fruits and vegetables for the town and school.
• Charleston, West Virginia, opened a community grocery store that would provide access to fresh groceries for 14,000 residents, and the city of Austin, Texas, did something similar.

There were, in addition, scores of grants to food pantries and other nonprofits that help people find the food they need. The proposal for New York City fits well with how these communities used SLFRF to address food access.

Above are just a handful of the tens of thousands of useful projects made possible by fiscal recovery funds. Some uses were more effective than others, however. For example, although modernizing state unemployment insurance systems was a useful endeavor (see above), more than $22 billion was also spent replenishing state unemployment insurance trust funds, which was unnecessary. UI trust funds hold UI taxes paid by businesses, to make sure funds are available to pay UI claims during spikes in unemployment. While those funds had, indeed, been depleted by the pandemic recession, state UI trust funds are designed to be self-correcting.2 They have automatic mechanisms to raise employer payroll taxes when the trust fund has been drawn down, to rebuild the funds and be prepared for future downturns. It was wholly unnecessary to use fiscal recovery funds to refill trust funds that would have returned to full strength on their own. Spending SLFRF to refill trust funds was a missed opportunity to support economic growth and strengthened public services (Banerjee, Martinez Hickey, and Sawo 2021). Future fiscal recovery projects should not make refilling UI trust funds an allowed use, though they should continue to support modernization of and upgrades to UI systems.

SLFRF accomplished its goals without driving inflation

Finally, it is worth noting that, despite politically motivated claims to the contrary, there is little evidence that SLFRF, or indeed the entire $1.9 trillion American Rescue Plan, was a significant contributor to inflation. As Bivens, Banerjee, and Dzholos (2022) show, the rise in inflation starting in 2022 was a global phenomenon, one that impacted countries, regardless of whether they provided fiscal relief to their economies during COVID-19. Nor was inflation correlated with the rapid decrease in unemployment the U.S. saw, thanks in part to ARPA. Rather, inflation was primarily driven by the dramatic supply shocks to various sectors of the economy caused by COVID-19, and then exacerbated by the Russian invasion of Ukraine in early 2022. Given the scale of the crisis policymakers were confronted with in early 2021, they were right to spend at the scale of the problem, and critiques blaming that spending for inflation are not backed up by the data. Moreover, policy measures that prioritized lowering inflation would have led to either lower employment or lower real wage growth, as there was no policy option that would have lowered inflation, increased wage gains, and supported the strong job growth of 2021–2024 (Bivens 2024).

Conclusion

ARPA’s State and Local Fiscal Recovery Fund was a great success. By spending at the scale of the problem, the federal government aided the economic recovery, supported the maintenance of public services, and gave myriad governments the chance to make innovative choices that have improved the well-being of their communities. A smaller SLFRF would have slowed our economic recovery and made governments more cautious about enacting bold policies to protect working families.

By giving recipient governments so much flexibility in using the funds, the Biden administration allowed every state, county, city, territory, and tribal government to fashion the response most appropriate to their particular needs. When faced with a crisis that had so much unpredictability, this was the right decision.

We don’t know when the next economic downturn, global pandemic, or climate disaster will hit. Whenever it does, federal policymakers should seek to emulate the model set by ARPA.

Notes

1. The devastating Flint, Michigan, water crisis of the 2010s is a prime example of a situation in which too many bureaucratic hurdles worsened a disaster. Flint was facing a serious fiscal crisis and therefore lacked the internal capacity to apply for federal funding (which they would have received) that might have prevented lead contamination of the water supply. See GAO 2015 for more details.

2. At least they should be, provided policymakers have set adequate UI tax base rates. See Perez 2025 for more information.

References

Banerjee, Asha, Sebastian Martinez Hickey, and Marokey Sawo. 2021. “States Are Choosing Employers over Workers by Using COVID Relief Funds to Pay Off Unemployment Insurance Debt: Policymakers Shouldn’t Be Afraid to Increase Taxes on Employers to Improve Unemployment Insurance.” Working Economics Blog (Economic Policy Institute), November 19, 2021.

Bivens, Josh. 2020. “Getting Serious About the Economic Response to COVID-19.” Working Economics Blog (Economic Policy Institute), March 9, 2020.

Bivens, Josh. 2024. “The Post-Pandemic Recovery Is an Economic Policy Success Story: Policymakers Took the Best Way Through a Rocky Path.” Working Economics Blog (Economic Policy Institute), October 1, 2024.

Bivens, Josh, Asha Banerjee, and Mariia Dzholos. 2022. “Rising Inflation Is a Global Problem: U.S. Policy Choices Are Not to Blame.” Working Economics Blog (Economic Policy Institute), August 4, 2022.

Callaghan, Peter. 2021. “The Minnesota Legislature Approved $250 Million for Pandemic Worker Bonuses. Should the State Give Away More Than That?” Minnpost, August 12, 2021.

Callaghan, Peter. 2022. “How the Legislature’s Deal on Pandemic Worker Bonuses and Unemployment Insurance Got Done.” Minnpost, May 4, 2022.

Childers, Chandra. 2023–2025. Rooted in Racism and Economic Exploitation (report series). Economic Policy Institute, October 2023–June 2025.

Colorado, State of. n.d. “Regional Grant Navigators” (web page). Accessed December 3, 2025.

Cooper, David. 2020. “Without Federal Aid, Many State and Local Governments Could Make the Same Budget Cuts That Hampered the Last Economic Recovery.” Working Economics Blog (Economic Policy Institute), May 27, 2020.

Cooper, David, Mary Gable, and Algernon Austin. 2012. The Public-Sector Jobs Crisis: Women and African Americans Hit Hardest by Job Losses in State and Local Governments. Economic Policy Institute, May 2012.

Economic Policy Institute. 2025. Racial and Ethnic Disparities in the United States: An Interactive Chartbook. Economic Policy Institute. October 2025.

Jefferson, Rita. 2025. Anti-Tax Revolts Backfire: What We’ve Learned from 50 Years of Property Tax Limits. Institute on Taxation and Economic Policy, July 2025.

Kamper, Dave. 2025. “Some States and Localities Will Be Better Prepared to Fight a Possible Recession Because of How They Used ARPA Fiscal Recovery Funds.” Working Economics Blog (Economic Policy Institute), April 30, 2025.

Kamper, Dave, and Emma Cohn. 2024. “Time Is Running out for State and Local Governments to Obligate American Rescue Plan Funds.” Working Economics Blog (Economic Policy Institute), October 17, 2024.

McArdle, Megan. 2025. “Zohran Mamdani Has a Seriously Bad Idea—for Grocery Stores.” Washington Post, July 1, 2025.

McNicholas, Celine, Josh Bivens, and Heidi Shierholz. 2020. “The Next Coronavirus Relief Package Should Provide Aid to State and Local Governments, Protect Employed and Unemployed Workers, and Invest in Our Democracy.” Working Economics Blog (Economic Policy Institute), April 27, 2020.

Perez, Daniel. 2025. Holding the Line: Unemployment Insurance. Economic Policy Institute, September 29, 2025.

Rochford, Patrick, Julia Bauer, and Michael Wallace. 2024. “Obligate It or Lose It! Preparing for the Upcoming ARPA SLFRF Obligation Deadline.” National League of Cities, October 1, 2024.

Shierholz, Heidi, and Josh Bivens. 2013. “Four Years into Recovery, Austerity’s Toll Is at Least 3 Million Jobs.” Working Economics Blog (Economic Policy Institute), July 3, 2013.

U.S. Department of the Treasury (Treasury). 2024. “State and Local Fiscal Recovery Funds: New Obligation FAQs Webinar” (web page). Accessed December 3, 2025.

U.S. Department of the Treasury (Treasury). 2025. “Public Data: State and Local Fiscal Recovery Funds” (web page). Accessed December 11, 2025.

U.S. Government Accountability Office (GAO). 2015. Municipalities in Fiscal Crisis: Federal Agencies Monitored Grants and Assisted Grantees, but More Could Be Done to Share Lessons Learned. Publication number 15-222, March 2015.

Wakeley, Dev. 2021. “Alabama Is Making a Costly Mistake on COVID-19 Recovery Funds. Here’s a Better Path Forward.” Working Economics Blog (Economic Policy Institute), November 8, 2021.

Two years ago, the California Fast Food Council—composed of worker, industry, and government representatives—instituted a $20 minimum wage for workers at large chain fast-food restaurants. But the Council has not raised the minimum wage further, and inflation has steadily eroded fast-food workers’ real wages since then. The authors argue that a 3.5% raise—the maximum adjustment the Council can recommend—would be a necessary yet modest step because it will only partially offset the average 4.2% cost of living increase since April 2024.

In fact, lower-income households have faced higher inflation than the overall inflation rate, largely because housing has been a higher share of their budgets. This means that indexing based on the overall inflation rate would fail to fully restore the affordability lost to fast-food workers since the enactment of the $20 wage standard, making such an adjustment even more modest—and necessary.

One impediment to this adjustment is opposition from fast-food restaurant operators, who argue that raising workers’ pay to $20 harmed their businesses and that they cannot absorb any further increases. However, the weight of empirical evidence shows that the $20 minimum wage has raised wages while not causing significant job loss. And compared with the initial setting of wage standards, indexed changes are very small and therefore unlikely to push up prices. Failing to adjust for inflation is essentially a backdoor method for unraveling the wage standard that policymakers passed into law.

“Automatically adjusting minimum wages for inflation is necessary for protecting affordability for low-wage workers,” said Josh Bivens, EPI chief economist and co-author of the report. “The California Fast Food Council should prioritize a cost-of-living adjustment in 2026 to prevent rising prices from erasing workers’ gains. A failure to regularly index for inflation provides a windfall to low-wage employers at the expense of their frontline employees.”

The Council was preparing to discuss a wage adjustment in June 2025 when the chair resigned. It is expected to take up the issue when the governor names a new chair, which has yet to happen. Given that almost two years have passed since the initial setting of the $20 wage standard—a year and a half that has seen continued inflation—the Council should prioritize this cost-of-living adjustment in 2026 to prevent rising prices from erasing the gains made by fast-food workers. One impediment to this adjustment is opposition from fast-food restaurant operators, who argue that raising workers’ pay to $20 damaged their businesses and that they cannot absorb any further increases.

This debate in California between fast-food workers and employers highlights the importance of regular and automatic adjustments to wage standards (like minimum wages) that ensure inflation-adjusted living standards for low-wage workers do not erode over time.

Indexation is often an afterthought in debates over wage standards. But it can turn out to be the most important part of any policy that sets a wage standard. This report examines salient issues related to indexing wage standards and offers recommendations for policymakers. Its key arguments are:

• Wage standards are necessary and efficient because of unbalanced power in labor markets.
• Wage standards that are fixed in nominal terms and have no automatic adjustment (like the federal minimum wage) get weaker every single year that passes without a legislated increase. The cumulative erosion of inflation-adjusted wage standards often exceeds the initial legislated increase.
  • For example, in inflation-adjusted terms, the federal minimum wage today is lower than it was in 2007, the last time a new standard was passed into law.
• Mandating higher wages for any group of workers will set off a chain of adjustments elsewhere in labor and product markets. What these adjustments eventually mean for relative incomes, prices, and employment is an empirical question.
  • Thankfully, minimum wage increases are some of the most well-studied events in economics, and the weight of empirical evidence is that they do not measurably increase overall inflation or lead to significant job loss, but they do raise the inflation-adjusted pay of targeted workers.
• Adjusting wage standards only for increases in inflation is actually a conservative policy in the sense of minimizing potential burdens on low-wage employers. More ambitious targets for adjustment—like wages or even productivity—could be preferable depending on the specific case.
  • In the case of the California Fast Food Council, providing a price-based adjustment to account for inflation since the initial adoption of the $20 minimum wage in April 2024 is an appropriate and modest step.
  • A 3.5% increase in the wage standard—the maximum adjustment the Council can recommend—is also conservative because it will only partially offset the actual 4.2% cost of living increase since April 2024 and because it does not account for ongoing productivity improvements in the sector.
• Over the past decade—and continuing since April 2024—the inflation rate faced by lower-income households has been higher than the overall inflation rate, largely because housing is a higher share of lower-income households’ budget. This means indexing based on the average inflation rate would fail to fully restore the affordability lost to fast-food workers since the enactment of the $20 wage standard, making such an adjustment even more modest (and even more necessary).

Wage standards are necessary because of unbalanced labor market power

Modern labor markets—particularly those that low-wage workers participate in—are characterized by significant employer power. Low-wage employers rarely if ever negotiate pay with workers, instead posting take-it-or-leave-it wage offers. Further, when a given employer lets its own wages lag those of potential competitors, workers’ exit from the lower-wage firm is far less common than would be predicted under truly competitive labor markets where employers robustly compete for workers.

The seminal source for modeling labor markets as situations where employers have substantial wage-setting power is Manning (2003), who describes this situation as one of “monopsony” power in labor markets.The literal definition of monopsony is a market with a single buyer. At points in history (think 19th century “company towns” in rural and isolated areas) this kind of literal monopsony may have existed. But Manning and those who have built on this work point to several features and frictions in real-world labor markets that make it hard for workers to effectively search for better jobs. These job search barriers effectively grant employers excess market power over workers even when there are numerous employers. Some of these frictions include things like lack of information about wages and other policies of alternative employers, transportation restrictions that require workers to look for jobs only in places near their home or public transit nodes, child care considerations that require a job’s location be compatible with picking up kids at a regular time, along with many other factors.

Employers use these barriers to employees finding better outside options to “mark down” wages below what would be necessary for employers to attract and retain workers in competitive labor markets. These markdowns can be large enough to push workers’ pay well below the value they produce for the employer, making pay levels inefficient.

At the level of the total economy, the excess power of employers in labor markets and their ability to markdown wages can be seen in the gap between economy-wide productivity (the amount of income generated in an average hour of work in the economy) and the hourly pay (including benefits) of typical workers.

Figure A

Wage standards—like minimum wages—can correct for this excess employer power. This leaves low-wage workers with higher pay and living standards and moves the economy to a more efficient allocation of workers across jobs. It can in theory even lead to an increase in employment. This degree of employer power in labor markets and the inefficiency of labor market outcomes without wage standards help explain the general empirical finding that minimum wage increases in the United States have not caused significant employment declines, a finding that is counter to what one would expect if labor markets were competitive.1

California’s fast-food minimum wage has had minimal employment effects

Current evidence suggests that California’s fast-food minimum wage is no different in that it has raised wages without causing large, negative employment reductions. There are four studies on the specific wage and employment effects of the California fast-food minimum wage. Three studies show both sizable earnings effects and limited-to-no employment changes. One analysis, in contrast to the other three studies, shows moderately negative employment effects, but also found the policy raised the total earnings of fast-food workers.

Schneider, Harknett, and Bruey (2024) surveyed fast-food workers in large chains and showed that relative to other states, the California policy raised wages and had no effect on the usual number of hours of fast-food workers in the quarter after the minimum wage change. With data from Equifax, Hamdi and Sovich (2025) compared fast-food establishments within large firms across different states and found that California fast-food establishments raised wages by about 12% and increased employment by a statistically insignificant 2%. Sosinskiy and Reich (2025) used data from the Quarterly Census of Employment and Wages (QCEW) to study employment and earnings trends in fast-food restaurants in California relative to those in other states and to full-service restaurants in California, which are not directly bound by the fast-food minimum wage. The authors’ preferred specification estimated a wage increase of about 7% and an employment decline of just under 1% that was statistically indistinguishable from zero. Finally, Clemens, Edwards, and Meer (2025) used QCEW data and estimated a similar wage increase of about 8%, but also a statistically significant employment decline of over 3%.2

In interpreting employment changes from a minimum wage increase, it’s best to compare the size of estimated wage effects with the estimated employment effects. The ratio of these two estimates—the own-wage elasticity of employment3—helps to gauge whether any employment changes were small or large relative to how much the policy actually raised wages. When the ratio is more positive than -1, total fast-food worker earnings rose even after accounting for potential employment losses. Standardizing the estimates by dividing employment and wage effects also allows us to make consistent comparisons across these studies and with studies of other minimum wage increases.

For the three studies where it is possible to calculate them, the own-wage elasticities are 0.19 (Hamdi and Sovich 2025), −0.12 (Sosinskiy and Reich 2025), and −0.40 (Clemens, Edwards, and Meer 2025). The first two are consistent with small or no employment impacts, but the last one moves into “medium negative” territory. All three studies’ estimates imply that the policy increased the aggregate earnings of fast-food workers, but the last study implies that employment losses caused fast-food workers to receive only about 60% of the potential earnings increase spurred by the minimum wage hike.

Even though Sosinskiy and Reich (2025) and Clemens, Edwards, and Meer (2025) use similar data, one important difference is that the Sosinskiy and Reich (2025) study controls for population changes. Net immigration rapidly fell after the implementation of the policy, disproportionately affecting California’s population levels. For example, according to the latest Census estimates, California’s resident population did not grow in 2025, whereas the rest of the country’s population grew by about 0.5%. Not accounting for these different population trends between California and elsewhere could cause an analysis to overstate any employment declines stemming from the policy, particularly if fast-food employment levels are sensitive to falling labor supply or a shrinking customer base. In their appendix, Sosinskiy and Reich (2025) find that ignoring population changes causes their estimates to be more negative.

In addition, when selecting a comparison group for fast-food workers, Clemens, Edwards, and Meer (2025) use fast-food workers in other states and high-wage industries in California, but they do not directly compare the California fast-food sector with the California full-service sector, which is not covered by the policy. Comparing the two sectors would be especially useful for capturing underlying economic trends if slowing population growth is driving declines in both fast-food and full-service employment levels. Indeed, Clemens, Edwards, and Meer (2025) show that the policy did not raise wages in the California full-service sector, but full-service employment in California declined by close to 2%. Failing to account for this decline in full-service employment also causes the Clemens, Edwards, and Meer (2025) estimates to be more negative.

Regardless of the source of these differences, the average own-wage elasticity across the three studies is −0.11, suggesting that the fast-food policy was successful in raising wages without causing sizable job losses. This point estimate is very similar to the median elasticity of all published minimum wage studies on restaurants (see Dube and Zipperer 2025). However, even if the policy were associated with larger employment reductions, measured job losses may still overstate the consequences for low-wage workers. First, lower headcount employment in the fast-food sector does not automatically translate into reduced employment or lower wages for low-wage workers if they move to other low-wage jobs, like retail, where they must be paid at least the California $16.90 minimum wage. Second, a measured decline in headcounts in a high turnover sector like fast-food is more likely to manifest as more weeks in between jobs rather than being shut out of work completely; in that case, some fast-food workers would indeed be working less but earning more money over the course of the year due to higher hourly wage rates.4

Why wage standards need to be automatically adjusted

If wage standards stay fixed in nominal terms, they are reduced in real (inflation-adjusted) terms every year inflation is nonzero. When there is a burst of rapid inflation, these real wage cuts get large very quickly. In fact, steady inflation can combine with policy inaction to leave wage standards lower in real terms than they were the last time a legislated increase happened.

Take the example of the federal minimum wage. Its current value of $7.25 came into effect in 2009. Today’s inflation-adjusted value of the federal minimum wage is almost 40% lower than its historic peak. It reached this peak in 1968, in an economy where productivity (the income generated in an average hour of work in the economy) was just 46% as high as it is in 2025. 5

Figure B

Adjusted for inflation, the 2025 value of the federal minimum wage is in fact lower than it was in 2007 when the U.S. Congress and president last signed a legislated increase into law. Put simply, without effective and automatic indexation, higher wage standards can be eroded almost entirely over time.

Today’s debate over the cost-of-living adjustment to the California Fast Food Council’s minimum wage often frames such adjustments as imposing new burdens on low-wage employers. But inflation since April 2024 means that the real minimum wage paid to California’s fast-food workers has been steadily cut since then. From April 2024 to January 2026, as measured by the consumer price index for all urban wage earners (CPI-W), this cut amounts to 4.2%. Without indexation, any burden on employers from this wage standard has fallen considerably since its adoption, providing a windfall to low-wage employers at the expense of their frontline employees. A failure to regularly index for inflation is essentially a backdoor method for unraveling the wage standard that policymakers passed into law.

Price indexing wage standards is a necessary and conservative policy

Raising wage standards each year by an amount equal to inflation holds low-wage workers’ living standards steady at the level that prevailed when the wage standards were set. For example, the $20 minimum wage for fast-food workers in large chains in California came into effect in April 2024. If these wages are indexed regularly to account for inflation since then, this will keep California fast-food workers’ living standards frozen at April 2024 levels going forward.

This is a clear improvement compared with outright erosion of living standards. But it remains the case that price indexing wage standards is a conservative policy in the sense that it minimizes any potential burdens on low-wage employers. It is a conservative policy for two reasons: (1) indexed wage changes are very small relative to the initial phase-in of wage standards, and (2) indexing for prices allows productivity growth in the wider economy to steadily reduce any potential burden or need for adjustment imposed by wage standards.

Price indexations are very small increases to wage standards

The increases to wage standards that result from price indexation are significantly smaller than the increases that result when the standards are initially phased in. For example, say that the last federal minimum wage increase in 2009 also indexed for subsequent price changes. The initial phase-in of the higher federal minimum wage saw it rise from $5.15 to $7.25 between 2007 and 2009. This constituted an average annual change of 19% for these two years. The average annual inflation rate (measured by the consumer price index for all items) between 2007 and 2024 was just 2.5%.

If the initial introduction of higher wage standards does not cause problematic outcomes, then it is very hard to see how the much smaller changes spurred by indexation for price changes would cause any.

The research on minimum wages provides very little reason to worry that changes in the United States in recent decades have caused any such problematic outcomes. The most commonly expressed worries about minimum wage increases are employment losses and upward price pressure.

We noted earlier that studies looking specifically at the California wage standard continue a common pattern in research on the employment effects of phased-in minimum wages: Employment declines caused by these minimum wage changes tend to be extremely modest or even zero on average. If one applied the modest measured employment losses stemming from the large initial increase in fast-food wages to the much smaller indexed adjustments, these already small employment losses become totally trivial.

The same logic holds regarding potential upward price pressures stemming from indexation: Compared with the initial setting of wage standards, indexed changes are very small and therefore unlikely to push up prices.

It is a fact that one person’s income is another person’s cost, so as low-wage workers’ pay rises, this raises costs for their employers. These employers could pass on these costs (in part or in full) to their customers by raising prices. But even if the entirety of the wage increases driven by price indexing wage standards was passed on in the form of price increases, overall price pressures would be extremely modest and low-wage workers would still unambiguously come out ahead.

Say that low-wage workers’ pay constitutes a third of labor costs in the fast-food sector, and that labor costs in turn constitute a third of total costs of fast food.6 If low-wage workers’ pay rises by 3.5% due to price indexing, this would increase prices the employer charges customers by less than 0.4% even if the full amount was passed on as price increases. Because fast food accounts for less than 3% of the overall inflation consumption basket, even a 0.4% increase in fast-food prices would raise overall prices by only 0.01%.

Price indexing still sees reductions in low-wage workers’ relative pay and allows productivity growth to steadily erode any potential burden on low-wage employers

We noted earlier that price indexing a minimum wage essentially holds low-wage workers’ pay frozen thereafter at the level that prevailed when the wage was introduced. Again, this is better than allowing inflation to erode the real value of pay, but average incomes throughout the overall economy are not frozen over time in real terms. Instead, they rise faster than prices over any reasonable period. Inequality often keeps this growth in average living standards from reaching many (or even most) workers and families in the economy, but the potential for living standards to rise is generated every year of positive economic growth.

This means that even when wage standards are indexed to prices, low-wage workers’ relative standing in the economy still falls over time. Further, because low-wage workers’ earnings are a cost to their employers, this means that even with price indexing, any potential burden of wage standards on low-wage employers slightly declines any year that productivity rises. In this sense, price indexing of wage standards—providing regular cost-of-living adjustments based on price growth—is a conservative policy that allows the costs and benefits of wage standards to slowly erode over time relative to developments in the larger economy.

A quick example can help make this point. Say that pay for low-wage workers at a particular employer amounts to 20% of the final price of the firm’s output. Say that productivity (how much output is generated with each hour of work) rises by 2% per year. If low-wage workers’ pay rises only with inflation (and not with productivity) and all other firm costs rise with inflation and productivity, this implies that over 10 years the share of low-wage workers’ pay in total costs would fall to just 16.4% of total costs. Employers could use this decline in real costs to either lower their prices to consumers or raise their profit margins. Either way, so long as there is any growth in productivity, the burden of low-wage workers’ pay to employers falls even when this pay is indexed to inflation.

Price indexing is not the only option for adjusting wage standards. One could, for example, index growth in minimum wages to growth in wages at other parts of the wage distribution—growth in the median wage for example.7 An even more ambitious indexing choice would be to match wage changes to changes in average wages or even economy-wide productivity.8

The obvious benefit of using these alternative wage indexations would be faster wage growth and higher living standards for low-wage workers. The potential downside is that they do not allow any potential burden from higher wages for employers to relent over time—meaning that if the initial setting of wage standards is high enough to cause problematic outcomes (job losses or rapid price increases), then this would not smooth over time with wage indexation. Price indexation, conversely, would actually allow any higher than optimal initial wage standard to become less binding over time. In this sense, it is a conservative choice that is highly responsive to the pressures faced by low-wage employers.

In the case of the California Fast Food Council, the $20 minimum wage enacted in 2024 was an admirably ambitious standard. There is little persuasive evidence that it is too high in that it has caused any problematic outcomes on either the employment loss or price increase fronts. Yet it was high enough to provide a significant wage boost for affected workers. For these types of ambitious standards, indexing to prices seems necessary to protect workers’ gains yet conservative in that it puts declining pressure on low-wage employers over time. Further, since 2019, the limited-service restaurant sector has seen significant productivity growth—roughly 2% per year—which should allow any price indexation to be easily absorbed with no wrenching adjustments for employers.9

Different groups face different inflation rates: The case for discretion in indexing

The benefit of indexing wage standards for inflation is the protection it provides for the living standards of low-wage workers. The costs are the various adjustments or burdens forced onto employers. Because the group of low-wage workers and employers are heterogenous, and because inflation is measured by the aggregation of price changes across the entire economy, there remains room for judgement and discretion in balancing these costs and benefits.

The California Fast Food Council has some discretion, as they can either index wages up to 3.5% for inflation or they can decline to index these wages and let them be eroded.

We noted before that indexing only for prices (as opposed to indexing for wages or productivity growth) results in a steady reduction in any economic burden wage standards might place on employers. So long as these employers see any growth in productivity (the efficiency with which each hour of labor generates output), then having some portion of their wage costs fixed in real terms will see these costs become a progressively smaller share of total output over time. In this sense, simply choosing to index by prices means the cost of wage standards to employers is set to shrink consistently over time.

In terms of the benefits to low-wage workers, recent years have seen a large jump in the overall price level. Any given episode of inflation is likely to have uneven effects across groups in the economy. For example, the inflation of the 1970s was actually accompanied by an increase in real wages, even for low-wage workers.10 The inflationary spike in 2021 and 2022, conversely, was largely driven by large increases in profit margins, which meant that real wages for most workers fell in those years.

More systematically, inflation faced by various groups in the economy can diverge if they have different consumption baskets that skew average price growth in a predictable way. For example, housing makes up a larger share of consumption spending for lower-income households than higher-income households, and in recent decades the price of housing as measured by the consumer price index has slightly outpaced overall price growth. This implies that inflation faced by lower-income households has likely been systematically higher than that faced by higher-income households. This makes the overall CPI that informs discussions of wage indexation inadequate for fully protecting lower-wage workers from inflation in recent years.

Concretely, the CPI-W, which is the price index the Council can target, has risen by 4.2% since April 2024. This means that a 3.5% cost of living adjustment—the largest that can be granted by the Fast Food Council—would not quite neutralize the affordability losses experienced by workers since the $20 minimum wage was enacted. Research from the Federal Reserve Bank of New York (2025) indicates that households in the bottom 40% of the income distribution saw inflation between April 2024 and August 2025 (the most recent data point available) that averaged 0.2% higher than overall inflation. This means actual inflation faced by many fast-food workers in California exceeded 4% since the introduction of the $20 wage standard.

The bias in actually experienced inflation stemming from housing runs even deeper. The housing component of the CPI essentially assumes everybody is paying market rent for their housing. There are good reasons for this decision, but it means that discretion and judgement must enter into using the CPI for different purposes. Well over half of the U.S. population owns their homes, and these people have significantly higher incomes on average than renters. Homeowners either have no monthly housing payment or pay a mortgage that is fixed over time and therefore experiences no inflation. By assuming these homeowning households experience the average amount of rental inflation each month the CPI overstates actually experienced inflation for homeowners.

This means when weighing the interests of low-wage workers against other economic actors—including consumers facing potential price increases stemming from wage standards—the real gap in living standards growth is likely larger than what would be implied by assuming all households face the same CPI inflation. Given this, there is a strong case for policymakers to use their discretion to put a countervailing thumb on the scale by boosting low-wage workers’ pay.

Notes

1. For a review of the estimates of employment loss caused by minimum wage increases, see Dube and Zipperer 2025.

2. There is an additional study by Pandit (2026) that estimates the fast-food minimum wage caused an 8% decline in staffing intensity based on long-duration visits from mobile phone location data. However, the study finds almost all of the estimated effect occurred before the actual policy went into effect, with little-to-no change in the proxy for employment activity after the effective date of the minimum wage increase on April 1, 2024. It is hard to believe that in a very high turnover industry like fast food—where employers can adjust employment levels rapidly by reducing hiring—that businesses would reduce staffing levels several months before being compelled to pay higher wages, but then not change employment levels at all after actually being required to increase wages. The study also provides no evidence on wage changes, cannot distinguish between headcounts and hours reductions, and excludes new businesses that may have started during the policy period.

3. For an explanation of the importance of the own-wage elasticity in interpreting studies of the minimum wage’s effect on employment, see Dube and Zipperer 2024.

4. See Cooper, Mishel, and Zipperer 2018 for the importance of accounting for turnover rates when assessing the likely implications of any measured employment decline.

5. See Economic Policy Institute 2025a for data on productivity levels over time.

6. Both of these assumptions are likely close to true or overstate the actual price pressure that would be experienced from price indexing wage standards in fast food. For the leisure and hospitality sector—the larger sector in which fast-food (or limited-service) restaurants are embedded—aggregate weekly payrolls are roughly $10 billion. To estimate low-wage workers’ aggregate pay, we took the number of leisure and hospitality sector workers making less than $17 per hour in 2024 (5.7 million) and multiplied this by $17 and by 35 hours per week. All of these (the high $17 threshold for defining “low-wage”, the assumption that all making under $17 were making exactly $17, and the 35 hours per week) likely increase the estimate of low-wage workers’ wage bill in the sector. Making these generous assumptions yields a weekly wage bill of roughly $3.4 billion, or just over a third of the total wage bill in the sector. For total labor costs as a share of total output in the sector, we used the Composition of Gross Output by Industry table from the GDP by Industry accounts of the Bureau of Economic Analysis.

7. Growth in wages has been used to index some labor standards. Under the overtime rule enacted by the Obama administration the salary threshold for being granted automatic rights to overtime protections was set at the 40th percentile of annual earnings in the lowest-wage region of the country.

8. Social Security uses an “average wage index” to deflate workers’ past earnings to calculate their initial Social Security benefit amount. This implicitly credits recipients for overall economic growth (overwhelmingly determined by productivity) over the course of their working life.

9. This figure calculated from data provided by the Detailed Industry Productivity database from the Bureau of Labor Statistics.

10. See Economic Policy Institute 2025b, specifically the wages for workers at the 10th percentile.

References

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Cooper, David, Larry Mishel, and Ben Zipperer. 2018. Bold Increases in the Minimum Wage Should Be Evaluated for the Benefits of Raising Low-Wage Workers’ Total Earnings. Economic Policy Institute, April 18, 2018.

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Schmitt, John. 2013. Why Does the Minimum Wage Have No Discernible Effect on Employment? Center for Economic Policy and Research.

Schneider, Daniel, Kristen Harknett, and Kevin Bruey. 2024. Early Effects of California’s $20 Fast Food Minimum Wage: Large Wage Increases with No Effects on Hours, Scheduling, or Benefits. The Shift Project, October 2024.

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