One of Zohran Mamdani’s signature campaign promises is to raise New York City’s hourly minimum wage from $16.50 to $30. While the socialist’s “$30 by ’30” proposal sounds like a windfall for lower-income New Yorkers, economic data suggest that it would limit employment opportunities for poor and working-class residents.
As of 2020, the median hourly wage of workers who live and work in New York City was around $29. Raising the minimum wage to $30, nearly double today’s rate, would impose a wage floor higher than half of working New Yorkers’ hourly earnings.
That would push many lower income residents out of the job market entirely. Economists often use the Kaitz index—the ratio of a country or region’s minimum wage to its median wage––to measure the minimum wage’s effect on employment. A lower Kaitz index suggests that the minimum wage is pricing relatively few workers out of the market; a higher Kaitz index suggests the opposite. Historically, the Kaitz index hovered between 0.48 and 0.55 at the federal level…