Jobs May Be Growing From Minimum Wage Increase


It has been a long-perpetuated myth that raising the minimum wage will be detrimental for the economy. New evidence suggests states that elected to increase their minimum wage from the start of 2014 may be experiencing significant growth in jobs as a result.

The information obtained from a study conducted by Ben Wolcott from the Center for Economic and Policy Research. 13 states—Florida, Vermont, Rhode Island, New York, New Jersey, Washington, Oregon, Montana, Connecticut, Arizona, Colorado, Ohio, and Missouri—adjusted their minimum wage at the beginning of the year either in response to increasing inflation or as a result of new legislation. Throughout the first five months of the year, Wolcott reports those states had an average change in employment is .99 percent, compared to an average .68 percent change in states that did not adjust their minimum wage.

Wolcott’s analytical research at least partially dismantled the opinion raising minimum wage would devastate job growth perpetuated in some corners. Washington, which currently has the highest minimum wage nationwide in addition to having enjoyed boosts to small business jobs in 2013, has continued to experience steady job growth.

The study conducted by Wolcott expands upon earlier data collected by Goldman Sachs, which examined the same statistics throughout the entirety of 2013. Both Goldman Sachs and Wolcott were able to conclude growth in jobs may be resulting from an increase in states’ minimum wage.

Another recent survey of 350,000 small businesses sheds further light on the matter. Results from that study found San Francisco, the metropolitan area with the highest minimum wage in the country, also experienced the largest percentage of annual job growth. Sustaining the $9.32 an hour minimum wage rate for fast food workers are believed by some to be the cause of job losses. The opposite was found to be true. More small business jobs are being generated in San Francisco than in any other city.

Many detractors of a minimum wage increase choose to remain blissfully unaware of the fact that offering workers a wage capable of providing stability helps to boost sales in the economy, which in turn results in even more jobs. Some opponents have resorted to citing a study by the Congressional Budget Office that attempted to argue the stance raising the minimum wage would result in the loss of more than 500,000 jobs. However, the study quickly lost traction when it was determined increasing the wage would have a positive impact on the lives of 16.5 million Americans. Recently, the Los Angeles Economic Roundtable was able to deduce increasing the minimum wage in Los Angeles County could potentially generate 50,000 new jobs for workers.

In Washington State, the Seattle City Council plans for a slow increase of the minimum wage over a period of seven years. Ed Murray, Mayor of Seattle, is responsible for the new proposal, which is a direct response to fast-food workers nationwide who have been campaigning for a $15 minimum wage. The mayor’s pledge is the first step towards a new bargaining system which reinforces interaction between workers and the government.

There is now evidence in direct contradiction to postulation that raising the minimum wage would have a negative impact on the economy. Growth in jobs may be resulting from an increase in the minimum wage in several states throughout the nation, and their example should provide a paradigm for the rest.

By Samuel Williams

The Washington Post
Think Progress
United States Department of Labor

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