Job Creation Faster in States that Raised the Minimum Wage

A new study from the Center for Economic Policy Research found across-the-board positive effects from minimum wage increases in 13 states:

At the beginning of 2014, 13 states increased their minimum wage. Of these 13 states, four passed legislation raising their minimum wage (Connecticut, New Jersey, New York, and Rhode Island). In the other nine, their minimum wage automatically increased in line with inflation at the beginning of the year (Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont, and Washington state).

As CEPR noted in March and April posts, 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.

The chart below shows the percentage change in employment for each state. The baseline is the average of the employment figures for the last five months of 2013 (August to December), which is measured against the average of the employment levels for the first five months of 2014 (January to May). As was the case with the earlier analyses by GS and CEPR, employment growth is still faster in states where the minimum wage went up.
wolcott-2014-06-30_494

Of the 13 states that increased their minimum wage in early 2014, all but one (New Jersey) are seeing employment gains. Furthermore, nine of the remaining 12 states are above the median for this period. The average change in employment for the 13 states that increased their minimum wage is +0.99% while the remaining states have an average employment change of +0.68%.

This is all good news for places like Washington D.C., SeaTac and Seattle where living wage laws are taking effect.

Via our partners at the Center for Economic Policy Research

  • Leave a Reply

Your email address will not be published.

More To Read

September 15, 2022

2022 Changemakers – Remixed!

Making Change, Together!

August 19, 2022

The Child Care Emotional Roller Coaster

Decades of underfunding has left the child care sector on the brink of collapse

August 16, 2022

2022 Inflation Reduction Act: A Strong Step Toward Rebuilding our Economy but Families Need More

We applaud the swift passage of this historic legislation and will continue to advocate for investments in the care economy