Axios' Stef Kight and Dion Rabouin report: 18 states rang in 2019 with minimum wage increases — some that will ultimately rise to as high as $15 an hour — and so far, opponents' dire predictions of job losses have not come true.
Why it matters: The data paints a clear picture — higher minimum wage requirements haven't reduced hiring in low-wage industries or overall.
Opponents argue that raising the national minimum wage would cause workers to lose their jobs, fail to combat poverty, and prompt fast food chains and others to raise prices or implement self-service checkout.
But job losses and price hikes haven't been pronounced in the aftermath of a recent wave of city and state wage-boost laws.
- "The minimum wage increase is not showing the detrimental effects people once would’ve predicted," Diane Swonk, chief economist at international accounting firm Grant Thornton, tells Axios.
- "A lot of what we’re seeing in politics is old economic ideology, not what economics is telling us today," she says.
By the numbers: Axios used Bureau of Labor Statistics data to compare job growth rates in four states with low minimum-wage laws vs. eight states with high minimum-wage laws, looking specifically at the food service and hospitality sectors.
- Since 2016, all 12 states have seen growth in restaurant, bar and hotel jobs. (We picked that year because it was when California became the first state to pass a $15 minimum wage law, which takes full effect in 2023.)
- Three of the four states with job growth that's higher than the U.S. median have passed laws that will raise the state minimum wage to at least $13.50.
- Three of the five states with the slowest job growth rates were ones that did not have a state minimum wage above the federal minimum of $7.25 an hour.
- An outlier was Massachusetts, which had the slowest job growth in the sector and currently has the highest state minimum wage: $12 an hour.
Yes, but: There could still be negative long-term effects, such as businesses choosing to locate in states with lower minimum wage requirements, according to a N.Y. Fed study.
- "The danger is extrapolating too far and saying, 'We should raise wages to $30 an hour,'" Swonk says. "The current minimum wage increases were successful because they were regionally based, and not national or one-size-fits-all."
The bottom line: Opposition to higher minimum wage laws is increasingly based in ideology and orthodoxy rather than real-world evidence, economists say.