Ohio Right Wing Spreads Minimum Wage Jobs Myth

In Ohio and other states, progressives are pushing ballot initiatives to raise state minimum wages above the federal minimum of $5.15 an hour, where it’s been stuck since 1997.

The right wing in Ohio is fighting against the initiative with the old argument that a minimum wage increase would lead to fewer jobs:

This is economics 101. When you raise the minimum wage, you cost young people and low-income people their jobs,” [the conservative Buckeye Institute’s Matthew] Carr said. “Businesses don’t create as many of them, because they cost more now.”

But here are the facts:

1. A higher minimum wage does not mean higher unemployment. One comprehensive study found increases in the minimum wage in various states in the late 1980s and early 1990s did not result in increased unemployment. It found a minimum wage increase in New Jersey did not cause a decrease in lower-wage jobs.

2. Small business growth has been greater in states with minimum wage levels above the federal level. A report by the Center for American Progress and Policy Matters Ohio found that the “11 states with a minimum wage above the federal minimum of $5.15 per hour had higher rates of small business growth between 1997 and 2003.”

3. State minimum wage hikes have increased payroll and revenue without creating job loss. “A recent report from the Wisconsin Department of Workforce Development said last year’s increase in the state’s hourly rate — to $5.70 from $5.15 — produced $175 million in additional payroll and a $3 million boost in state tax revenue.”