No, Republicans — Raising the Minimum Wage Doesn’t Lead to Job Loss

The nation recently learned about the benefits of a minimum wage increase the residents from the great city of San Jose are experiencing.  Our country also learned about the U.S. Conference of Mayor's call to Congress on raising the minimum wage.  There is more.  Republicans, take note: according to the Center for Economic and Policy Research, raising the minimum wage doesn't lead to job losses, it leads to stronger job growth.  Here's what the media has to say:

From The Fiscal Times:

Beginning in January of this year, 13 states individually increased their own minimum wages, creating a sort of natural experiment in which the remaining states could serve as a control group. All that was left was for someone to do the math, and the Center for Economic and Policy Research, building on research conducted earlier in the year by Goldman Sachs, delivered that in a report last week.  Of the 13 states that raised their minimum wages, all but one saw job growth in the first five months of 2014. To be sure, that's a small achievement in an environment where the national economy is adding something on the order of 250,000 jobs per month.

The really interesting finding is that the states that raised the minimum wage saw job growth that was, on average, higher than states that did not. The 37 states that did not raise the minimum wage at the beginning of this year saw employment increase by .68 percent. Those that did raise the wage saw employment increase by .99 percent. The takeaway number from the CEPR report, however, is that evidence appears to be accumulating to suggest that the CBO's take on the impact of the wage was overly pessimistic. 

From USA Today:

A recent study by the Center for Economic and Policy Research attempts to undercut the argument that raising the minimum wage kills jobs.  The study, which updates a Goldman Sachs analysis to include data from April and May, shows that the 13 states that increased their minimum wages on Jan. 1 have had stronger employment growth than the 37 states that didn't.

The average change in payrolls in the 13 states that increased their minimum wages was 0.99% vs. 0.68% in the other states.  On January 1, Connecticut, New Jersey, New York and Rhode Island boosted their pay floors as a result of legislation. The other nine states – Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington – automatically raised their minimums by smaller amounts based on inflation.

Critics of minimum wage increases argue they raise business costs, forcing employers to lay off workers or hire fewer people.  But CEPR senior economist John Schmitt says one reason minimum pay hikes actually could bolster employment growth is that they help businesses fill openings more quickly.

From ThinkProgress:

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.  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.

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. Progress in raising the entire country's minimum wage has stalled, though. Republicans blocked a bill that would have increased it to $10.10 an hour.

From Mic News:

Each of these states has experienced higher employment: When critics lambaste an increase in the minimum wage in America, they often cite that it would be a job killer, an economic burden, and harmful to business.

New data may have debunked these arguments. Ben Wolcott of the Center for Economic and Policy Research found that in just the past five months, the 13 states that have increased their minimum wages saw higher employment growth than the states that did not.  A boost in the minimum wage from the national $7.25 an hour has done wonders for companies like Gap, cities like San Jose, Calif., and states like Washington, which saw the largest increase in small businesses last year.

And, as Jared Bernstein notes in the Washington Post:

Those who argue that increases in the minimum wage will lead to large numbers of layoffs have a problem: They're consistently wrong. Job losses from moderate increases in the minimum wage have repeatedly been shown to range from zero to "small," the latter meaning many more low-wage workers benefit from the policy than are hurt by it.

Why are opponents of a raise so wrong about this? 

As the New York Times editorial board notes: "If the minimum wage had merely kept pace over time with inflation…it would be between $11 an hour and $18 an hour today."  [7/8]  Speaker Boehner, it's time to act.  It's time for all Americans to experience the fruits of a minimum wage increase and a functional Congress.