WASHINGTON, D.C. (July 8, 2014) — In the 13 states that increased their minimum wage on Jan. 1, 2014, whether through legislation or automatic increases like in Washington state, job growth has been higher so far this year than in states where the minimum wage stayed the same.
Extreme corporate interests often argue that raising the minimum wage will lead to job losses, but once again, the evidence suggests otherwise. The Center for Economic and Policy Research looked closely at the data and found states that raised their minimum wage increase have seen an average increase in employment of 0.99%, while the static states saw an increase of only 0.68%.
Of the 13 states, all but New Jersey saw employment gains and nine of the 13 states are above the median state in job growth. Four of the 13 states saw their minimum wage increase because of new legislation, while the rest saw automatic increases related to inflation. The states in question are: Arizona, Colorado, Connecticut, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont and Washington.
Economists at Goldman Sachs conducted a simple evaluation of the impact of these state minimum-wage increases. GS compared the employment change between December and January in the 13 states where the minimum wage increased with the changes in the remainder of the states. The GS analysis found that the states where the minimum wage went up had faster employment growth than the states where the minimum wage remained at its 2013 level.
When we updated the GS analysis using additional employment data from the BLS, we saw the same pattern: employment growth was higher in states where the minimum wage went up. While this kind of simple exercise can’t establish causality, it does provide evidence against theoretical negative employment effects of minimum-wage increases.
AFL-CIO Now contributed to this report.