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NewsFlash: October 25, 2006

Minimum Wage – 6 State Initiatives and the Real Job Impact

On Nov. 7, voters in Arizona, Colorado, Missouri, Montana, Nevada and Ohio will decide whether to approve ballot initiatives to raise the state’s minimum wage and tie future increases to a cost-of-living index. Meanwhile, they are hearing contradictory claims that raising the minimum wage either destroys thousands of jobs or benefits low-wage workers with no negative effect on jobs. Two new Economic Policy Institute releases show how many workers in these six states would benefit from a minimum wage increase, and what the real job impact of increases have been nationwide.

First, in an EPI Snapshot, economic analyst Liana Fox examines those six states and finds that if all of these measures pass, more than 1.5 million workers would receive raises, with 652,000 children of these workers directly benefiting. Counting the 22 states plus the District of Columbia that have minimum wages above the federal rate already, 70% of the U.S. workforce will live in a state with a higher-than-federal level if voters approve all the proposals.

Second, the EPI paper “ Economic Effects of State Minimum Wage Increases,”  [PDF] also by Fox, examines the methods and findings of the major research that has been done on the effects of minimum wage raises. Where it was once accepted almost unquestioningly that raising the minimum wage was bad for jobs, better methods and the data derived from more experience have led many experts to conclude that any negative effects of a minimum wage raise are negligible and outweighed by the positive effects of workers who receive them.