Last month the U.S. Department of Labor released data indicating that, contrary to critics’ claims, raising the minimum wage in some states might have encouraged job growth, not chilled it.
In 13 states that raised their minimum wages on Jan. 1, jobs have grown at a faster pace than in states that didn’t raise the wage. The figures contrast with a Congressional Budget Office report in February concluding that raising the minimum wage to $10.10 an hour, as the White House would like, would cost 500,000 jobs.
Some of the 13 states boosted minimum wages automatically to keep pace with inflation, but four — Connecticut, New Jersey, New York and Rhode Island — specifically raised them irrespective of an index.
Observers are quick to note that although the growth is welcome, it doesn’t establish a cause-and-effect of higher wages-better job growth. In other words: It’s complicated.
Some economists claim there no adverse employment effects from small increases in the minimum wage; some say there are. But a few things are clear — by international standards, U.S. minimum wage has been low for a long time; Congress adjusts it only occasionally; and those adjustments aren’t frequent enough to prevent inflation from eating away the value of the raise. The current federal minimum wage, $7.25 per hour, was raised most recently in 2009. According to The Economist, that means its real value is where it was in 1998.
Read the whole story on NPR.