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Report: Minimum Wage Increases Are Not Killing Jobs

Economy Memo Pad Politics

Report: Minimum Wage Increases Are Not Killing Jobs


Remember when the right was convinced that raising the minimum wage would lead to disastrous job losses, all because of a Congressional Budget Office report that suggested President Obama’s plan to do so would cost the country jobs? It turns out that states that have upped their minimum wage are actually doing much better than states that haven’t.

A Center for Economic Policy and Research (CEPR) report released last week shows that in the 13 states that increased their minimum wage at the beginning of 2014, job growth was higher than in states that did not. Four states — Connecticut, New Jersey, New York, and Rhode Island — had passed legislation to raise the minimum wage, while nine — Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington — automatically did so due to inflation. The CEPR used the average of employment levels from the last five months of 2013 and compared them to the data from the first five months of 2014 to determine the rate of employment growth.

All but one of those states (New Jersey) saw an increase in employment. The average change for these 13 states was +0.99 percent, while the states that did not raise their minimum wages only had an average change of +0.68 percent. Four (Washington, Colorado, Oregon, and Florida) were in the top 10 states that had seen job growth, and nine saw growth above the median rate. New Jersey, however, is in the worst shape in the country, with an 0.56 percent decrease.

The report is an update on April figures from Goldman Sachs economists, which had also shown the benefits of raising the minimum wage. The author, Ben Wolcott, says the report doesn’t show that an increase necessarily creates jobs, but that it doesn’t have the negative effects on the economy that so many were concerned about.

“While this kind of simple exercise can’t establish causality, it does provide evidence against theoretical negative employment effects of minimum-wage increases,” he wrote.

Washington, which currently has the highest minimum wage ($9.32), saw the largest increase in small-business jobs in the nation. Of the four states that upped their minimum wage this year, Connecticut’s largest jumps were in professional and business services, New York’s were in private and educational health services, and Rhode Island’s were in manufacturing in March. Though New Jersey saw a decrease in overall job growth, its largest increase in jobs was in leisure and hospitality.

Ten other states have passed laws raising their minimum wage this year, with Massachusetts’ move to $11 per hour being the highest increase in the country. The effect on the economy as a whole remains to be seen. A federal minimum-wage hike will most likely not pass in a Republican-controlled House.

But this report makes it pretty clear that not only does a minimum-wage increase not have a negative impact on job growth, but it might actually help workers and businesses. It’s going to be harder and harder for Republicans to come up with excuses not to do it.

Below is the CEPR’s chart comparing states based on changes in job growth


AFP Photo/ Scott Olson

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  1. TZToronto July 7, 2014

    One reason research is done is because simplistic thinking is very often wrong. But evidence such as that presented here will mean nothing to those who hate the working poor for being, well, poor.

    1. plc97477 July 8, 2014

      I think they hate the poor because they worship power and the poor have none.

      1. Kevin Woods July 8, 2014

        More to point…..they RESPECT power…..and the poor have none.

    2. Kevin Woods July 8, 2014

      TZ…..it ain’t fair for you to call the Right, ‘simple thinkers’.

      OK…..maybe it is. (LOL)

      1. Mark July 8, 2014

        He can call them simple, but definitely not thinkers. Wouldn’t want to insult thinkers.

  2. John Pigg July 8, 2014

    Before we raise the minimum wage. Democrats need to work with Republicans to get it paired with some method of inflation control. Who cares if we get a $10.00 an hr increase if they don’t raise it again for 10 yrs.

    It’s absolutely unacceptable that the current Federal Min Wage is not tied to an inflation mechanism.

    1. kathrynddaniels July 8, 2014

      my buddy’s
      sister makes $87 every hour on the internet . She has been unemployed for 6
      months but last month her payment was $19402 just working on the internet for a
      few hours. go right here M­o­n­e­y­d­u­t­i­e­s­.­C­O­M­

      1. Kevin Woods July 8, 2014


  3. Daniel Jones July 8, 2014

    The people that have been screaming for low/lower/no minimum wage know damned well that paying more won’t hurt job growth of the economy.
    They. Don’t. Care… especially not about the “little people”.

    1. Dominick Vila July 8, 2014

      I would not be surprised if one of the most important reasons for their opposition to raise the minimum wage involves the fact that it would accelerate the reduction of unemployment and would strengthen our economy. Both are poison for GOP chances in November and in 2016.

      1. charleo1 July 8, 2014

        Same game, different election. You know I used to think, mistakenly so, evidently. That every American knew how to sit aside their politics for what was good for the Country. But, now, after I watched the Right Wing blatantly, and overtly try to scuttle a weaken economy, in 2011. And their advocates agreed with it! I’m beginning to think we’re in a lot more trouble in this Country, than simply a matter of income inequity, or an imbalanced economy. I’m beginning to think, we’re witnessing a total bankruptcy in the moral, and patriotic, underpinnings of the Conservative Right Wing. And, I can say with more than a preponderance of liberal bias, that they truly do not care who gets hurt in the process. If that process leads them back into control of a gov. or, of a Country, they cannot, and will not bring themselves to support, until other, more caring, more vulnerable Americans
        with families to support, and children to educate, decide we simply cannot go on, without a functioning gov. and relent to the extortion. But it will be a deal with the Devil, if we do. If they care not about American children, refugee children, about Veterans, or unemployed families losing their homes, or minorities, or Civil Rights, or the Right to vote, or democracy itself, if it doesn’t favor them? Then what do they care about? What, at the end of the day, tugs at their heartstrings? Gets them exercised to point of livid indignation? Try raising the Capital Gains Tax, or, enacting Climate Change Regulation. Fixing a broken Immigration System, or raising the wages of the working poor. Working with a Black President. Then, we see their passion. Don’t tell me who you are. Show me what you do, and I’ll tell you who you are.

        1. Dominick Vila July 8, 2014

          In my opinion, what drives the far right is intolerance, lack of compassion, hatred, greed, and lack of respect for the opinion and choices of others, including the majority of Americans.
          We have to go no further than look at former President Bush’s response to a journalist a couple of years ago when he was asked what did he like he remember the most about his presidency. Response: Power and fame.
          I agree that some of the proposals rejected by the GOP are perplexing and suspicious. For example, why did an experienced and, purportedly, patriotic party reject investment in infrastructure when it is evident that our infrastructure is falling apart, and that such investment would have accelerated the economic recovery? Why did they reject the Veterans Jobs Act? These are the kind of decisions that make people suspicious of their commitment to the American people, our values, and our best interests. I don’t consider them traitors, but I agree with you that they have proven, time and again, a willingness to go as far as necessary to meet their political goals, even when doing so is detrimental to our well being.

          1. Mark July 8, 2014

            If, as you say, they are putting political power ahead of the needs of the country, then they are traitors. We elect our representatives to govern. When they do not govern, but instead obstruct, you are a traitor!

          2. Dominick Vila July 8, 2014

            Conservatives believe what they are doing is in the best interest of the country. They are convinced that their policies and vision are the correct path to follow. Even when we point out to them the consequences of their policies, they find excuses to justify their decisions and stay the course.

          3. charleo1 July 8, 2014

            Exactly Dom. And, what would things look like, if everyone approached their jobs in a like manner? We don’t like the Chief. So we’re not going out to house fires anymore. Because he thinks we ought to, and we are not about have fire department policy rammed down our throats. Then we have the specter of other idiots out there yelling, Yeah! Let ’em burn! Since when is is the fire dept. supposed to put out house fires? Then suddenly, the whole idea of having a fire department at all, is characterized as, The Chief’s, “controversial policies,” of using water hoses to douse flames, “are coming serious under fire,” from some Conservative Firefighters. And while the Country has this supposed, “serious debate,” the house burns to the ground. Then, polls show people not happy with Fire Chief, after he allows citizen’s house to go up! Conservative Firefighters vow to oust Chief. When does it end?

        2. latebloomingrandma July 8, 2014

          Amen! And a budget will show what you value and who you are.
          Also, I find it telling that with all the problems that President Obama had to contend with–domestic and foreign–he unequivocally said that the most difficult day of his presidency was the day the 26 children were gunned down in Sandy Hook. Somehow it didn’t move many who were more worried about re-election than to take action about this escalating gun violence problem.

        3. Allan Richardson July 9, 2014

          If these people had been on the Titanic, they would have begun shooting holes in the hull so it would sink faster. They would not mind dying with the rest as long as they could blame the Captain before they died.

          1. charleo1 July 10, 2014

            Isn’t that sort of jihadist? Ideologues all have a commonality, that the ends will always justify the means. It’s incredible to me even such a small minority of millions here, have decided, or have been sold on the idea, such tactics are warranted. It’s very concerning that such radicalism is not rejected out of hand. I thought we were a smarter Country????

          2. Allan Richardson July 10, 2014

            I never SAID that the Republicans were jihadist, but if the bomb jacket fits …

          3. charleo1 July 10, 2014

            I like it!

  4. Dominick Vila July 8, 2014

    The idea that increasing disposable income will kill jobs is a concept that only the most naive can embrace. Raising the minimum wage to a livable wage would not only take millions of Americans out of poverty, it would actually stimulate the economy even more. Our economic model is based, mostly, on consumerism. The more money people have, the more they spend, and the more they spend, the more jobs are created to satisfy demand.

    1. Kevin Woods July 8, 2014

      Dominic…..you are exactly correct!!!

      It is an economic fact of life that the working poor (and a lot of the middle-class, too) will spend just about all the money they have available to them. They just don’t have the flexibility to do a lot of saving.

      When you raise their income, however marginally, the result will be more money being pumped into the economy as they buy the items they don’t have, and better versions of the items that they do have.

      And as you’ve stated, there is a need…..a NEED…..to employ more people in more jobs to meet and sustain that demand.


  5. Eleanore Whitaker July 8, 2014

    What many Americans miss with the stagnation of US wages is the real back room agenda. Think about this. If these corporations who live off our tax dollars continued to reduce wages to that of 3rd world countries with whom they import and export, wouldn’t that force Americans to be less financially independent and less controllable?

    Take a good hard long look at the countries where poverty is the worst. The average citizen has NO control over their own futures, much less their own incomes.

    In the US, this “War on Wages” was an emanation of the same plantation mentalities that kept free slave labor and sharecroppers from having a shred of personal control over their lives.

    Big money often buys far more than excess, obscenity and ostentatious living..it often buys human life into a subtle form of slavery that reduce self-respect to its lowest possible levels.

  6. ps0rjl July 8, 2014

    One day we will look back on all the naysayers who say raising the minimum wage will kill jobs and realize they were on the wrong side of history.

    1. charleo1 July 8, 2014

      Sure. And the next time, the same naysayers will say the same thing.
      Like they’ve said every time before the minimum wage has been raised. It’ll kill jobs. It’ll kill low wage jobs for homeless drug addicts, and drug dealers will suffer. Nothing is ever debunked in the Right Wing World. Never will you hear a Winger say, Gosh, we sure got that one wrong. Never. Did we hear, Bush, and Cheney say they got Iraq wrong, as these two war criminals traveled the circuit selling their books? No. And no matter what happens there, they were right, and always will be. And everyone else that says different will be wrong.

  7. DAK27 July 8, 2014

    “New Jersey, however, is in the worst shape in the country, with an 0.56 percent decrease.”

    This simply cannot be true. I thought Christie was the Great White Hope of the GOP and now you’re telling me his state is doing the worst? GASP! You mean the Republicans have been LYING to us all along? Their plans aren’t better? They aren’t smarter, more determined, or have God on their side? Who would of thunk it. (Once you discount facts and historical trends or any of that ‘math an science’ stuff of course… You know, like the typical GOP voter.)

  8. ExRadioGuy15 July 8, 2014

    Duh! As I wrote in my Facebook note, “What a minimum wage increase would ACTUALLY do”, there’s one fact that derails the argument against it: the American worker has never been more productive. If the workers of a business already produce the maximum amount they can to meet demand and demand increases, more employees need to be hired to meet the increased demand. And, if you raise wages of the middle class, demand is increased because the middle class can’t afford to “hoard” income, as too many of the wealthy do. It’s simple Keynesian economics….
    As usual, the GOP arguments in financial issues are based on greed and logical fallacies. it’s a good bet that, if a Republican says something, it’s completely opposite of the truth.

    1. johninPCFL July 8, 2014

      You are completely correct.

    2. charleo1 July 8, 2014

      It all has to do with the way the wealthy think about pie. First, it’s their pie, all of it. Why? It’s a mindset, a mentality. God loves them more, whatever, it doesn’t matter. All of it belongs to them. And, the way they figure it, it’s a zero sum proposition. So, every crumb you have, the way they look at it, is a crime, or error, bookkeeping mistake, something, Right? Because, first of all, you deserve no pie at all. So, if you have even one crumb of the pie, they didn’t allow you to have, you’ve stolen it. That, or you, and your Socialist Democrats have illegally taxed them for it. Or the Communist Union you belong to has threatened them into giving it to you. Either way, it’s wrong, and they are determined to one way or another, get those few, ill gotten crumbs of pie you have managed to acquire, back where they belong, on their plate. Okay, so you’ve managed to get a crumb or two? Well, that means you need a plate. They just happen to have the plate market cornered. That’ll be 1/3 of your crumbs Sir, for a plate. Thank you very much! You’re gonna need a fork, right?

  9. charles king July 8, 2014

    People, do your (Critical Thinking) You know Who? the troble makers and You know Why? they are doing What? ever to cause problems for our nation welfare security. Capitalistic Pigs, Plutocracts with Monies to spend to corrupt our Jive Ass Representives, Republicans and Democracts, we know Who? they are so next time they raise their heads to get into office, VOTE their sorry A***** OUT. The country do not need these pieces of S****, VOTE them out and bring back your Democracy,your Unions, Your Public schools, your J A Z Z your good common sense get America back to the people, all the people Not some but to ALL the People. The VOTE is still Supreme so do your job, VOTEtheir sorry A***** OUt OUT OUT OUT Thank You are the magic words in my book. Love Ya All. Mr. C. E. KING

  10. Sep_Arch July 8, 2014

    There you go again, trying to be all logical and bringing up actual, real-world studies and stuff! Conservatives pride themselves on not being the “reality-based crowd.” Don’t you know the poor deserve less, and are therefore paid less? And being paid less proves they deserve less? Rinse and repeat this circular logic over and over again until you believe it!

    No studies will EVER induce Republicans to support a minimum wage increase. And they will continue to repeat the same tired slogans about an increase killing jobs (as though any biz owner ever hires more people than he needs just ’cause they are cheaper and suddenly has less work to be done when wages go up!) because they don’t WANT to increase the minimum wage and allow people to live without government assistance (which allows control). Which excuse they use really doesn’t matter and logic won’t change a thing.

  11. Independent1 July 8, 2014

    And not only does raising the min wage reduce the jobless rate, if companies were truly honest, they’d admit that raising the min wage would actually improve their bottom line.

    In Europe where the min wage is $12/hr, outlets for American multinationals like McDonald’s, are actually more profitable than their outlets are here in America. As many have pointed out, that’s probably because min wage workers in Europe have more money at their disposal to spend.

    But there’s also an additional benefit, the availability of a better selection of merchandise. We have a grandson who recently spent a couple weeks in Germany. While there he happened to frequent a Dunkin’ Donuts and was surprised to find a far more extensive selection of fancy pastries and sandwich selections which he had never seen in a Dunkin’ Donuts here in America. Possibly do to the fact that with a higher min wage, patrons were willing to pay a little more for their coffee and treat; and therefore the management was willing to extend the menu.

    I’m not sure about any other posters of this article, but I was not able to read the chart showing the Percent Change in the Employment by State. So I’m going to try downloading here for those who may be interested in being able to read it.

  12. lowCal90 July 9, 2014

    Around 95% of all outstanding homicide warrants in Los Angeles are for illegal aliens.

    1. Independent1 July 12, 2014

      Pure BS!! Fact is that criminal activity among illegal aliens is far less than among people born within the US. Although Hispanics or other immigrants together represent over 35% of the people living in California, only 17% of the California prison population is Hispanics (including illegals).

      Fact is that it is far safer to be around immigrants, especially illegals, than someone born in America. A good part of the reason for that is that illegals want to do everything they can to prevent being apprehended by the police, because they know there’s a great likelihood that if they get pulled in by the cops they may well be deported.

      See this from a California State Study:

      In this issue of California Counts, we examine the effects of immigration on public safety in California. In our assessments, we use measures of incarceration and institutionalization as proxies for criminal involvement. We find that the foreign-born, who make up about 35 per- cent of the adult population in California, constitute only about 17 percent of the adult prison population. Thus, immigrants are underrepresented in California prisons
      compared to their representation in the overall population. In fact, U.S.- born adult men are incarcerated at a rate over two-and-a-half times greater than that of foreign-born men.

      The difference only grows when we expand our investigation. When we consider all institutionalization (not only prisons but also jails, halfway houses, and the like) and focus on the population that is most likely to be in institutions because of criminal activity (men ages 18–40), we find that, in California, U.S.-born men have an institutionalization rate that is 10 times higher than that of foreign-born men (4.2% vs. 0.42%). And when we compare foreign-born men to U.S.-born men with similar age and education levels, these differences become even greater. Indeed, our
      evidence suggests that increasing educational requirements in the provision of visas would have very little effect in the criminal justice arena.


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