States that raised the minimum wage have higher employment growth

fed.minwageThe Arizona Republic today engages in yet another useless debate between two of its opinion writers, Linda Valdez and the Rush Limbaugh of The Republic, Doug MacEachern, over the minimum wage. Compassion: Raising minimum wage or leaving it alone?

Rush, er, I mean Doug, spews the usual bullshit from right-wing apologists for the plutocracy, which is contradicted by numerous economic studies and decades of Dept. of Labor statistics: “A minimum-wage hike induces employers to hire fewer workers, reduce training budgets and, if the increase is big enough, abandon hiring unskilled workers completely.”

Why does this man still have a job? He degrades the value of The Republic. A simple Google search would have turned up the latest research from the Center for Economic and Policy Research. Think Progress reports, States That Raised Their Minimum Wages Are Experiencing Faster Job Growth:

Think a higher minimum wage is a job killer? Think again: The states that raised their minimum wages on January 1 have seen higher employment growth since then than the states that kept theirs at the same rate.

The minimum wage went up in 13 states — Arizona, Connecticut, Colorado, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont, and Washington — either thanks to automatic increases in line with inflation or new legislation, as Ben Wolcott reports in his analysis at the Center for Economic and Policy Research. The average change in employment for those states over the first five months of the year as compared with the last five of 2013 is .99 percent, while the average for all remaining states is .68 percent.

Digging deeper, all but one of those states are experiencing increases in employment, and nine of them have seen growth above the median rate.

Wolcott-2014-06-30_494

Wolcott’s analysis builds on a previous one from Goldman Sachs, which did the same evaluation for just January and compares it to December of last year. It found that the states that had minimum wage increases experienced faster job growth than those without a raise.

This doesn’t mean that increasing the minimum wage necessarily creates more jobs. “While this kind of simple exercise can’t establish causality, it does provide evidence against theoretical negative employment effects of minimum-wage increases,” Wolcott writes. Indeed, it adds to the evidence that higher minimum wages may not hurt job growth as much as some have warned. Washington has the highest minimum wage and saw the biggest increase in small business jobs last year. Its job growth has also remained steady and above average in the 15 years since it raised its wage. When economists studied state-level minimum wage increases over two decades they didn’t find any conclusive evidence that the raises impacted job creation.

That’s all good news for the ten states that have increased their minimum wages this year. Massachusetts went the furthest, raising its wage to $11 by 2017, but three — Hawaii, Maryland, and Connecticut — passed the $10.10 minimum wage being pushed at the federal level by Democrats and Vermont increased its wage to $10.50. And some cities have gone even further, with Seattle enacting a $15 minimum wage.

Republicans have blocked a bill by Democrats in Congress that would increase the minimum wage to $10.10 an hour. How many times do I have to post about these economic studies and Dept. of Labor statistics refuting right-wing talking points about the minimum before people finally stop listening to these damn fools?

3 responses to “States that raised the minimum wage have higher employment growth

  1. Crackerhead

    “How many times do I have to post about these economic studies and Dept. of Labor statistics refuting right-wing talking points about the minimum before people finally stop listening to these damn fools?”

    Do you seriously think that posting here is going to effect changes in policy? First, this is just a little local blog that reaches a relative handful of people. You are like the little man standing on a soap box in London’s Trafalgar Square exercising his right of free speech. Second, the majority of that handful of people already think like you. You are hollering into an echo chamber of like thinking individuals. Third, the number of people who are converted by legal citations, economic studies, Dept. of Labor Statistics, etc., is miniscule. These things bore the average person to death because they are written in legalese and academia. Fourth, your arguments in favor of higher minimum wagers are counter intuitive. Even your Dept of Labor stats tap dance around the truth. You can’t raise the minimum wage without someone paying for it. Either the business owner pays it out of his profits, or he raises prices to cover the costs. It isn’t painless magic to raise it.

  2. Crackerhead

    “…it adds to the evidence that higher minimum wages may not hurt job growth as much as some have warned…”. In other words, there IS a negative effect but it isn’t as bad as some naysayers predict it will be.

    “While this kind of simple exercise can’t establish causality…”. But that won’t stop us from drawing our conclusions to suit our needs.

    Higher minimum wages are great for workers, but they force small businesses to make hard, often negative, decisions. To pretend it is revenue neutral or revenue positive for small business is idiotic.

    How much better would the job growth have been in those states had they not imposed higher minimum wages? Just because the higher minimum wage didn’t hurt as badly as it could have is not a ringing endorsement.

  3. As a companion post to this one, you should look at what is happening to the states that went full Tea-Party-tax-cuts-for-businesses (like New Jersey, Kansas, Arizona, and others).

    Kansas is a financial mess– thanks to tax cuts instituted by Sam Brownback and his Republican Legislature.
    http://www.msnbc.com/rachel-maddow-show/cautionary-tale-brownbacks-failed-kansas-experiment

    And in New Jersey…
    “Face the facts, Governor [Christie]. Wall Street just downgraded the state’s credit rating for the second time on Christie’s watch. We now have the third-lowest rating in the nation, and if California’s recovery continues, we’ll soon trail only Illinois.”
    http://www.njspotlight.com/stories/14/04/10/s-p-turns-thumb-down-on-christie-budgets-downgrades-bond-rating/?p=all