Labor Department Data Reveals Faster Job Growth in States With Higher Minimum Wage
New hiring data released by the Labor Department on Friday revealed that job growth has actually increased at a faster pace in the 13 states that raised minimum wages than in those that haven't.
The latest results contrast a Congressional Budget Office report released earlier this year, which found that a minimum wage hike to $10.10 an hour could result in a loss of 500,000 jobs across the country, Fox News reported.
The states of Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington increased their minimum wages to correlate with inflation. The other four -- Connecticut, New Jersey, New York and Rhode Island -- passed legislations that would increase wages.
According to the data, the job growth rate increased to an average of .85 percent from January to June in nine of the 13 states, while the other 37 states had an average of .61 percent growth rate.
Florida, which increased its minimum wage from $7.79 an hour to $7.93, experienced a rise of 1.6 percent, the highest of all 13 states. Vermont's job growth was reportedly flat, while the remaining 11 continued to see job growth.
Although the Labor Department's findings are encouraging to supporters, some economists, such as John Schmitt, a Center for Economic and Policy Research economist, acknowledged that there could be a myriad of reasons why hiring in those states have accelerated.
"It raises serious questions about the claims that a raise in the minimum wage is a jobs disaster," Schmitt said, adding that the data "isn't definitive" but is "probably a reasonable first cut at what's going on."
While in Denver last week, President Barack Obama cited the 13 states' better performance as another reason why the minimum wage should be raised nationwide.
"When ... you raise the minimum wage, you give a bigger chance to folks who are climbing the ladder, working hard. ... And the whole economy does better, including businesses," the president said.
However, Stan Veuger, a scholar at the American Enterprise Institute, and other economists insisted that the six months of data isn't enough to support the claims that minimum wage hikes would help job growth.
"It's too early to tell," Veuger said. "These states are very different along all kinds of dimensions."
In North Dakota, oil and gas drilling has helped the state's job growth rate rise to 2.8 percent, the most of any state, while not raising the minimum wage. And in Ohio, which increased its minimum wage to $7.95 from $7.85, the number of jobs rose by only 0.7 percent.
There are currently 22 states that have minimum wages higher than the federal requirement of $7.25. According to the National Conference of State Legislatures, 38 states this year have considered increasing minimum wages, the most on record, with at least 16 states expected to increase wages starting next year.
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