Study: Minimum wage increases don't negatively effect employment levels

Raising the minimum wage for the nation's lowest-paid workers doesn't reduce employment or slow hiring and will provide a boost to the economic recovery, a study released Monday shows. 

As several states consider raising wages above the federal minimum, the National Employment Law Project (NELP) noted that the new study reinforces more than 15 years of economic research showing that wage hikes boost incomes without slowing job growth.  

“This comprehensive new study provides the latest evidence that raising the minimum wage is an effective way to help families and our economy recover,” said Christine Owens, executive director of NELP. “As policymakers work to accelerate a weak recovery that’s been largely confined to low-wage industries, raising the minimum wage makes sense.”

The study examines every minimum wage increase over the past two decades, including increases during protracted periods of high unemployment, especially 2007 to 2009. 

This study follows a paper published last fall that examined the economic impact of minimum wage increases at the county level between 1990 and 2006 and found no evidence of reduced employment.

Seventeen states have raised their minimum wages higher than the federal level of $7.25 per hour, which pays a full-time worker $15,000 a year. 

Ten states have enacted measures to adjust their minimum wage levels each year to keep pace with the cost of living.

If the federal minimum wage had kept pace with the rising cost of living over the past 40 years, it would be more than $10 an hour now, according to the NELP. 

Legislators in Maryland, Illinois, California, Maine and Massachusetts have introduced bills this year to raise wages.

“Small increases mean that thousands of minimum wage earners, such as health aides, child care workers, restaurant workers, and retail clerks, are better able to put food on the table, provide for their children, and keep a roof over their heads," Owens said. "Congress and other states should follow the lead of states that have raised and indexed their minimum wage. The record shows that these increases help families and the economy.”

Meanwhile, lawmakers and policymakers in several states have sought "to ignore, dilute, or repeal minimum wage laws" in an effort to reverse core labor protections around the nation, according to NELP. 

In Florida, the state didn't raise its minimum wage this year as required by the state's constitution, prompting NELP and worker advocates to sue. 

In Missouri and Nevada, opponents are trying to freeze the minimum wage rate through their effort to repeal the indexing provisions of those states’ minimum wage laws, which were overwhelmingly approved by voters in ballot initiatives.  

In Maine, the governor and legislators are pushing legislation that would reduce the minimum wage for workers younger than 20. 

“In good times and bad, corporate lobbyists and CEOs argue that minimum wage increases kill jobs," Owens said. "It’s time to put those arguments to rest. Boosting the earnings of low-paid workers reduces turnover and absenteeism, increases morale and productivity, improves efficiency for employers, and does not kill jobs, even in hard economic times.”