The experience of the 13 states that increased their minimum wage on January 1st of this year might provide some guidance for what to expect here in Washington, DC when the city-wide minimum wage increases to $9.50 on July 1.

At the beginning of 2014, 13 states increased their minimum wage. Of these 13 states, four passed legislation raising their minimum wage (Connecticut, New Jersey, New York, and Rhode Island). In the other nine, their minimum wage automatically increased in line with inflation at the beginning of the year (Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont, and Washington state).

As CEPR noted in March and April posts, economists at Goldman Sachs conducted a simple evaluation of the impact of these state minimum-wage increases. GS compared the employment change between December and January in the 13 states where the minimum wage increased with the changes in the remainder of the states. The GS analysis found that the states where the minimum wage went up had faster employment growth than the states where the minimum wage remained at its 2013 level.

When we updated the GS analysis using additional employment data from the BLS, we saw the same pattern: employment growth was higher in states where the minimum wage went up. While this kind of simple exercise can't establish causality, it does provide evidence against theoretical negative employment effects of minimum-wage increases.

In this post, we can now bring these figures up to date with the data from April and May.

The chart below shows the percentage change in employment for each state. The baseline is the average of the employment figures for the last five months of 2013 (August to December), which is measured against the average of the employment levels for the first five months of 2014 (January to May). As was the case with the earlier analyses by GS and CEPR, employment growth is still faster in states where the minimum wage went up.


Of the 13 states that increased their minimum wage in early 2014, all but one (New Jersey) are seeing employment gains. Furthermore, nine of the remaining 12 states are above the median for this period. The average change in employment for the 13 states that increased their minimum wage is +0.99% while the remaining states have an average employment change of +0.68%. 

The experience of the 13 states that already increased their minimum wage in 2014 paints a very positive picture for Washington and its low-wage workers.

Note: All data taken from the BLS: “Regional and State Employment and Unemployment (Monthly),” Table 5, seasonally adjusted.

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  • Guest - S carter


    Also, they don't compare the rise (or fall) in the number of minimum wage jobs, only overall employment. The premise that raising the minimum wage leads to more factory jobs or tech jobs or whatever is laughable.

    from Eureka, CA, USA
  • Guest - TheOtherJim

    In reply to: Guest - S carter Report

    How is it laughable? The premise is simple: Put more money in the hands of low-wage workers and they will spend it, thus boosting the regional economy, thus leading to more jobs. Lower income people have much less discretionary income than do others higher up on the scale; most of their income goes to pay for necessities, such as food and housing. Because of this, any extra money they see is likely to be spent almost immediately on postponed purchases, and these expenditures lead to a multiplier effect. One dollar in the hands of someone in those circumstances leads to more than one dollar's worth of economic activity.
    (By the same token, the reverse is true for the wealthy. Give them more money -- say, in the form of a tax cut -- and that money is far less likely to make it back into the general economy. It might go for an expensive boat, if the person in question doesn't already have several, but it's more likely to get spent on the Wall Street Wheel of Fortune, where it basically disappears from the economy at large.)

  • Guest - Terrence


    After plenty of research and deliberation, I am certain that the minimum wage should not be raised.

    I know you cannot make a living off $7.25 per hour, but the purpose of the minimum wage from

    when it was first emplaced by Congress, in 1938 during The Great Depression, is to continue to

    ensure consumer spending and keep people from living on the streets, the lowest level of poverty.

    Sure raising the minimum wage to $15 sounds really appealing, until you weigh the consequences:

    inflation, decrease in education, job loss

    Inflation will occur when prices are raised by businesses to compensate for the new wages. Every

    business wants to at least maintain the same profit margins. Job loss will occur when businesses,

    mostly small businesses employing 15 employees or less, begin to shut down because there is no

    longer enough profit to cover expenses. If you can make $15 an hour at McDonalds or your local

    clothing store and be in the same pay range as Dental Assists, Chefs, Teachers, and low ranking

    Soldiers what reason will a lot people have to continue receive an education? None.

    A study by the Brookings Institution in 2013 concluded that with no preference to race, young

    adults who graduated from high school, maintained a full-time job and were at least 21 years old

    prior to marrying or starting a family had a 2% chance of landing in the poverty zone. Those same

    young adults had a 74% chance of living in the middle class zone. Those young adults who did not

    abide by all three conditions was determined to have 76% chance of living in poverty and only a 7%

    chance of being labeled as middle class. Education is the key to making the best life choices, without

    it the future of this country is lost.

    If you want to live above the poverty line then do what most of us have done… get an education!

    Stop looking for help from everyone around you (this of course does not apply to everyone) and

    help yourself.

    from North Carolina, USA
  • Guest - Christopher S. Sharp

    In reply to: Guest - Terrence Report

    There are plenty of homeless people that work forty hours a week for minimum wage. Do the math yourself and put your net income at just over two hundred dollars a week. Or better yet, go and find a minimum wage job and try to keep your car on the road and insured, your apartment (with the lights still turned on) food in the refrigerator and clothes on your back.

  • Guest - TJ


    The title of the graph makes no sense. "... End of 2013 to Beginning of 2014" is literally zero seconds.

  • Guest - Christopher S. Sharp


    Working for minimum wage.
    "My check was for forty seven dollars and sixty two cents for seven hours of hard labor." Seven hours of labor plus two hours of waiting time minus five dollars for gas. These numbers are from a real minimum wage job. Tell me how you can live anywhere but under an overpass when you earn an average of fifty dollars a day.

  • Guest - Chris Peterson


    The minimum wage should be abolished. Social Darwinism is the only way to weed out the weak links of society.

  • Guest - Albert Alfred

    In reply to: Guest - Chris Peterson Report

    Agreed, Chris. If you don't get an education, you don't deserve welfare. I don't want to pay for lazy people.

  • Guest - Albert Alfred

    In reply to: Guest - Chris Peterson Report

    Agreed, Chris. If you don't get an education, you don't deserve welfare. I don't want to pay for lazy people.

  • Guest - Geno Scalia


    What is it that people don't get? Raising the minimum wage has a direct correlation to reduced employment. That is factual, not conjecture. Try a different view. If we raised the minimum wage to $100 per hour, everyone understands that unemployment would increase exponentially, and severly damage the economy. This is because wages are the largest expense for every business, not one business, but all businesses. 70 percent of revenues at Fast food restaurants is payroll. Figure it out. If I double the wage, that means 105 percent of revenue is expenses. How would they deal with the additional expenses? To breakeven, they would have to raise the price of food at least 35%. This is a staple of lower income people. What happens to demand when you see a 35 to 50 percent price increase? Be realistic, demand drops exponenetially, price is not elastic.

    from Chicago, IL, USA

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