These Republican-leaning States Went Big on Minimum Wages.

Here’s What Happened to their Restaurant and Retail Jobs.

During the past decade, voters in five Republican-leaning states — Alaska, Arizona, Florida, Missouri, and Nebraska — enacted big minimum wage increases. These five were the only non-Democratic-leaning states with a minimum wage of $13 an hour or more in 2025. All five states are at, or are scheduled to reach, $15 an hour by mid-2027. By using ballot initiatives, voters in these states bypassed their legislatures that had failed to pass similar increases, even though the minimum wage is a very popular policy. By 2025, the population-weighted minimum wage across these states had nearly doubled from around $7.80 to $14.00 an hour. Meanwhile, 20 other states — like Texas, Georgia, or Tennessee — kept their minimum wage at the federal floor of $7.25, unchanged since 2009. These 20 (also Red or Purple) states serve as a clean “control group” for our five “treatment” states. A nice “natural experiment.” The map below shows these two groups of states.

So, what happened? Based on administrative payroll data covering nearly every private-sector employer in all 25 states from 2014 through 2025, the answer is clear: wages rose substantially, while restaurant and retail employment was unaffected.

The Treatment

Figure 1 shows the minimum wage in each treated state, their population-weighted average, and the flat federal floor.

Figure 1: Minimum Wage Levels

Alaska’s Ballot Measure 3 raised its floor from $7.75 in 2014 to $8.75 in 2015 and $9.75 in 2016, after which it climbed via CPI indexing to $11.91 in 2025; voters then approved Ballot Measure 1 in November 2024, putting it on track for $13 in July 2025, $14 in mid-2026, and $15 in mid-2027. Arizona’s minimum jumped to $10 in 2017, and reached $14.70 by 2025. Florida’s Amendment 2 — which passed with 61% of the vote — began phasing in at $10 in 2021, and is heading to $15 by 2026. Voters in Missouri approved increases twice, first in 2018 and then in 2024. Nebraska had 2 ballot initiatives; the first raised the minimum wage from $7.25 to $9.00 between 2015 and 2016. Then a second initiative led to an increase of $10.50 in 2023, $13.50 in 2025 and reaching $15 in 2026. These were not small changes. By 2025, the minimum-to-median wage ratio (also called the Kaitz index) in the four contiguous-US treated states had reached 55–59%, with a (population-weighted) average of 57%. (Alaska’s Kaitz index is more modest because its statewide median wage is one of the highest in the country; this will likely rise to around 50% as Measure 1’s step-ups take effect.)

\(\begin{array}{lccc} \hline \textbf{State} & \textbf{MW (2025)} & \textbf{Median wage} & \textbf{Kaitz index} \\ \hline \text{Alaska} & \$13.00 & \$28.33 & 46\% \\ \text{Arizona} & \$14.70 & \$24.79 & 59\% \\ \text{Florida} & \$14.00 & \$24.37 & 57\% \\ \text{Missouri} & \$13.75 & \$24.35 & 56\% \\ \text{Nebraska} & \$13.50 & \$24.75 & 55\% \\ \hline \textbf{Pop-weighted avg} & \textbf{\$14.04} & \textbf{\$24.55} & \textbf{57%} \\ \hline \end{array} \)

This places the four contiguous-US treated states alongside California (58%), Washington (56%), and New York (56%) in terms of the bite of the minimum wage. In fact, Arizona’s 59% is the highest Kaitz index of any U.S. state today; state-level Kaitz indices for the 30 states range between 37% and 59%, with a median of 52%. Internationally, a Kaitz of 57% puts these red minimum wage states in a similar range as Germany (~57%) and Canada (~55%), and not far from Australia (~61%) or the UK (~66%). (These comparisons adjust for the fact that OECD Kaitz ratios use full-time-worker medians; scaling by ~1.1 makes them comparable to all-worker medians, as I discuss in my new book, The Wage Standard.) In contrast, the federal minimum of $7.25 yields a 28% Kaitz index, making it the very lowest in the OECD by a wide margin. These Red- and Purple-state ballot initiatives have elevated their wage floors into the range that most high-income peer countries would consider normal.

Wages and Jobs

I use the BLS Quarterly Census of Employment and Wages, an administrative census covering nearly every private sector employer. Using this data, Figure 2 shows the divergence in restaurant-sector outcomes between these 4 “treatment” states with 20 “control states” that have stuck with the federal minimum of $7.25.¹

Figure 2: Restaurant Sector Treated-Control Gap: Wages and Employment

The red line tracks the growing gap in average weekly restaurant wages; the blue line tracks the gap in restaurant employment per capita. Shaded bands show 95% confidence intervals clustered by state, with both series normalized to zero in 2014.

First, the wage effect is large. Averaged over 2023–2025 relative to 2014, restaurant wages in ballot-initiative states grew 7.7 log points faster than in federal-floor control states (95% CI: [5.1, 10.2]). The gap has kept widening over time.

Second, there is no detectable employment effect. The gap in per-capita restaurant employment between these two groups of states has hovered around zero during this whole period. The 2023–2025 average of -0.3 log points is economically negligible, with a confidence interval [-3.4, 2.9] that is centered around zero.

From 2014 through 2016, before the major increases took effect, the two groups of states tracked each other closely. The wage divergence began just when the minimum wage differences arose. This timing gives us confidence that we are isolating causal effects.

The Own-Wage Elasticity

Researchers often use the own-wage elasticity (OWE), or the percentage change in employment divided by the percentage change in wages, to quantify the employment effect of minimum wage changes. An OWE of -0.2 would mean that job losses offset roughly 20 cents on the dollar that would have gone to low-wage workers as a whole from the minimum wage hike; that suggests quite an effective policy. By contrast, an OWE of -0.8 would indicate that job losses offset 80 cents on the dollar of potential earnings gains, making it a fairly ineffective policy.

Based on the same 2023–2025 versus 2014 numbers above, the restaurant wage gap was +7.7 log points, while the employment gap was -0.3 log points. This yields an OWE of -0.04, and a confidence interval of [-0.43, 0.36]. That’s about as close to zero as it gets, and consistent with the recent literature. And even with only five treated states, the confidence intervals rule out medium and large OWEs more negative than -0.43. The central finding is clear: when these five states substantially raised their minimum wages, restaurant employment largely stayed stable, even as pay grew substantially.

These estimates weight states by population. If we just use unweighted estimates, the OWE estimate is slightly positive at +0.07. The same pattern also holds when extending to the broader low-wage sector. In these five states, restaurant and retail workers account for roughly 40% of those earning below 125% of the minimum wage (CPS-ORG, 2023–2024). Combining retail and restaurant sectors (NAICS 44–45 + 7225), we find a wage gain of 5.8 log points and an employment change of -0.8 log points, producing an OWE of -0.15.

The Bigger Picture

Alaska, Arizona, Missouri, Florida, and Nebraska are not progressive strongholds. Their voters supported higher wage floors often on the same ballots where they backed Republican candidates. At the same time, the most common objection to minimum wage increases — that they kill jobs — does not find support, validating the voters’ decision. This is timely, because this June, voters in Oklahoma will decide on State Question 832 that would raise the minimum wage from the current $7.25 to $15 in 2029, and then tie it to cost-of-living. The broader evidence from 27 states raising their minimum wage since 2010 tells much the same story: a 10% increase in the average wage for restaurant workers, coupled with a 2.5% increase in restaurant employment (not statistically distinguishable from zero), leading to an OWE of 0.24.

This is one piece of a larger story I tell in my new book, The Wage Standard: What Went Wrong in the Labor Market and How to Fix It. The book traces how eroded labor market institutions, pervasive employer-side power, and corporate pay strategies drove a wedge between overall productivity and typical wages over the past four decades. I also identify concrete levers to close that wedge. Minimum wages are one leg of a three-legged stool, alongside full-employment macroeconomic policy and sectoral pay standards. These red-state ballot initiatives are evidence that the political conditions for the first leg are more favorable than what many people think. When asked directly, voters keep saying yes to higher wages. And the evidence keeps showing that they’re right.

[Last updated on 5/1/2026.]

1. Restaurant sector is defined as NAICS code 7225.