A think tank wants you to believe that every time the minimum wage goes up a dollar, the price of your necessities jumps 5.5%. The best evidence says the real number is about a quarter of one percent. That is not a rounding error. That is off by roughly twentyfold, and it is aimed squarely at convincing low-wage workers that a raise would rob them at the register.
In a June 29 Washington Times op-ed, Michael Saltsman of the Employment Policies Institute wrote that "for every $1 increase in the minimum wage, the price of necessities can rise by an average of 5.5%." [1]
THE CLAIM "for every $1 increase in the minimum wage, the price of necessities can rise by an average of 5.5%"
- Michael Saltsman, Washington Times op-ed, June 29 [1]
What the actual research found
The most rigorous study of this exact question read the receipts. Economists used billions of supermarket checkout scans to measure what happens to grocery prices when the minimum wage rises, and found that a 10% increase lifts grocery prices by about 0.36%. [2] The Upjohn Institute found the same order of magnitude for restaurants, about 0.36% per 10% increase. [3]
Put that on Saltsman's own footing. A $1 raise on a roughly $15 wage is about a 6.7% increase. Run it through the measured grocery pass-through, and you get a price rise of about a quarter of one percent, not 5.5%. [2] His figure is not a little high. It is more than twenty times the best evidence.
Data
| Saltsman claim | 5.5% |
|---|---|
| Best evidence (scanner data) | 0.25% |
The real-world test
We do not have to argue this in theory. California raised its fast-food minimum wage to $20 an hour in 2024, one of the largest such jumps in the country. Menu prices rose about 1.5%, roughly six cents on a $4 item, while covered workers' pay rose around 11%. [5] A real raise, a small price bump, nothing close to a necessities-wide 5.5% spike per dollar.
THE RECEIPTS
- Groceries: about 0.36% price rise per 10% wage increase (scanner-data study). [2]
- Restaurants: about 0.36% per 10% (Upjohn Institute). [3]
- California fast food: about 1.5% on menus after a $20 wage. [5]
The tell is in his own footnote
Give the other side its due: raising the wage floor does nudge some prices up, and pretending it costs nothing would be its own dishonesty. The measured cost is simply tiny. Here is the part that is not a judgment call. Saltsman's own cited source for the 5.5% figure, an Employment Policies Institute post, does not call it an average. It calls it a maximum, prices rising "up to" 5.5%, from a review with no disclosed author or method. [4] He took a ceiling from an advocacy shop, relabeled it an "average," and printed it in a national paper. The number was weak before he inflated the way he described it.
THE BOTTOM LINE A $1 raise moves necessity prices by cents on the dollar, not 5.5%. The figure is off by roughly twentyfold, and it misquotes the one source it rests on.
A raise is a raise. The grocery aisle is not where it disappears.
