Real World Evidence That Increasing The Minimum Wage Doesn’t Cost Jobs

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Last month, conservatives seized on a Congressional Budget Office report showing that increasing the minimum wage could result in job loss to argue that President Obama’s push to pay workers more would undermine the American economy and stifle growth. But a growing body of real world experiences is already proving the nonpartisan economists wrong.

As Bloomberg reports, in the 15 years since Washington state voters increased their minimum wage to a national high of $9.32, “job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate.” Payrolls at restaurants and bars, which are supposedly most vulnerable to job losses, actually expanded by 21 percent and poverty rates “trailed the U.S. level for at least seven years,” Bloomberg reports.

San Francisco experienced similar growth after increasing its minimum wage in 2004. A new book from three labor economists titled, “When Mandates Work: Raising Labor Standards,” found that in the seven years that followed, employment grew by more than 5 percent in the city, while other Bay Area counties experienced drops. Employment for restaurant workers also increased by 17.7 percent, faster than elsewhere in the Bay Area. Generally, states that increased base wages between 1987 and 2012 saw decreases in their unemployment rates 52 percent of the time.

Economists — who generally believe that increasing the minimum wage has a net-zero effect on job growth — argue that the policy can help businesses retain quality workers for longer, experience higher worker productivity, and push employers to cut waste elsewhere. A recent study from the Economic Policy Institute concluded that a $10.10 minimum wage would translate into a direct raise for 16.7 million workers and significantly boost economic spending.