Ballot Initiative 433 – a measure to increase Nebraska’s minimum wage gradually to $15 – will be the focus of a public hearing at the State Capitol on Tuesday. The initiative would increase wages for about 30% of Nebraskans and lift thousands out of poverty, OpenSky analysis shows.

Hundreds of thousands of Nebraska residents would benefit

More than 20% of Nebraska workers currently make less than $15 an hour and these residents would be directly affected by increasing the minimum wage, OpenSky analysis finds. Another 9.6% of Nebraska’s workforce would be indirectly affected by increasing the minimum wage. Most of these workers currently receive slightly more than $15 an hour, and they would likely receive pay increases as a result of the minimum wage increase as businesses work to retain and recruit workers.

This means that about 30% of the Nebraska workforce – 287,319 workers – would be positively affected by increasing the minimum wage. The average Nebraska worker would receive an estimated annual increase of almost $2,400, and more than 10,000 residents, including 3,500 children, would be lifted out of poverty.[1]

Impact on BIPOC communities would be significant

OpenSky analysis finds almost half of Nebraska’s Black workers, three out of five Latinx workers, more than two out of five Asian workers would receive raises if the minimum wage were increased to $15 an hour. More than one in five white workers also would see a wage increase under the initiative.

Increased minimum wage could help address workforce challenges

Analysis by the Center for American Progress shows states that have raised the minimum wage have been able to staff up more easily post-pandemic. This is likely due to the fact that these states and businesses didn’t have to raise their wages to stay competitive.[2] Conversely, states like Nebraska where the minimum wage is less than $15 an hour have had a harder time staffing up and face high demand for workers.[3]

Increased wages would help hardworking Nebraskans withstand high inflation

A common claim is that raising the minimum wage will increase already high inflation. However, the Economic Policy Institute (EPI) states[4] that the minimum wage “should only be raised after the current inflationary outbreak is far in the past is arguing that low-wage workers should have no serious protection against the damage to living standards being done by today’s price growth.”

EPI modeling shows that raising the minimum wage to $15 over five years would increase overall price levels by less than 0.1% per year.

Conclusion

By passing Ballot Initiative 433, the state has an opportunity to empower hardworking Nebraskans to contribute to their families and their communities, ultimately growing our economy.

Tuesday’s hearing on Ballot Initiative 433 starts at 1:30 p.m. in Room 1525 of the State Capitol. Nebraska Public Media will stream the hearing live.

[1] Modeling conducted by Laurel Sariscsany (University of Nebraska Omaha) using the 2018-2020 Current Population Survey, based on findings from Dube, A. (2019). Minimum wages and the distribution of family incomes. American Economic Journal 11(4): 268-304
[2] Center for American Progress, “Higher Minimum Wages Support Job Growth as the Economy Recovers From COVID-19,” accessed at https://www.americanprogress.org/article/higher-minimum-wages-support-job-growth-economy-recovers-covid-19/ on Oct. 17, 2022.
[3] Nebraska Public Media, “’Number One Business Problem’: Labor Woes Continue in Nebraska,” accessed at https://nebraskapublicmedia.org/ja/news/news-articles/number-one-business-problem-labor-woes-continue-in-nebraska/ on Oct. 17, 2022.
[4] Economic Policy Institute, “Inflation, minimum wages, and profits,” accessed at https://www.epi.org/blog/inflation-minimum-wages-and-profits-protecting-low-wage-workers-from-inflation-means-raising-the-minimum-wage/ on Oct. 17, 2022.