Not mutually exclusive
Opponents of minimum wage increases always contend that the policy inevitably leads to massive job losses, even though there is no record of that.
Critics seized on a Congressional Budget Office report early this year, which predicted that increasing the minimum wage from $7.25 to $10.10 an hour - as proposed by President Obama and others - would result in 500,000 lost jobs. The same report, however, said that a higher wage would increase earnings for 16.5 million workers, producing an overwhelmingly positive impact for the economy.
Now, statistics from the first six months of this year show, as has much longer history, that there is no direct correlation between a higher minimum wage and job creation.
State-by-state hiring data released Friday by the Department of Labor show that job growth the 13 states that independently have increased their minimum wages this year has been more robust than in states that have held the line.
Average job growth in those states was 0.85 percent from January through June, compared with 0.61 percent in the other states.
The statistics do not suggest that a higher minimum wage caused higher job growth, but they demonstrate that the higher minimum wage clearly did not thwart job growth, as critics had predicted.
Syliva Allegro, an economist at the University of California, Berkeley, said that businesses with many low-wage workers usually find other ways to reduce costs, rather than simply laying off workers or not hiring. Higher wages usually result in less turnover, for example, that reduces hiring and training costs.
Minimum wage rates are not the only factor affecting job growth. But the data show that better wages and job growth are not mutually exclusive.