States that raised minimum wage post faster job growth News added by Benefits Pro on July 22, 2014
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By Alan Goforth

Economists have long debated the impact of higher minimum wages on employment.

Now, new data from the Department of Labor suggests that raising the minimum wage in several states may have spurred job growth.

The 13 states that raised their minimum wages on Jan. 1 have added jobs faster than states that did not, the report said. According to the Associated Press:

“In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent.

“Nine of the 13 states increased their minimum wages automatically in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Four more states — Connecticut, New Jersey, New York and Rhode Island — approved legislation mandating the increases.”

Economists who support a higher minimum wage said the figures are encouraging, although they acknowledge they don’t establish a cause and effect. Hiring may accelerate in a particular state for many possible reasons.

“It raises serious questions about the claims that a raise in the minimum wage is a jobs disaster,” said John Schmitt, a senior economist at the liberal Center for Economic and Policy Research. “The job data isn’t definitive, but is probably a reasonable first cut at what’s going on.”

Economists have competing schools of thought on the impact of raising the minimum wage.

“Some studies, notably those lead by University of Massachusetts-Amherst economist Arin Dube, argue that there are no adverse employment effects from small increases in the minimum wage,” according to The Washington Post. “Other studies, notably those led by University of California-Irvine economist David Neumark, argue there is an adverse effect.”

Originally published on BenefitsPro.com
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