In economic circles, the minimum wage causes maximum debate. New data suggest that's unlikely to change anytime soon.
Of 11 states that increased the minimum wage at the beginning of 2015 through either legislation or ballot initiatives, payroll gains through June exceeded the U.S. average in six, while five lagged behind, according to Labor Department figures issued Tuesday in Washington.
South Dakota had the largest growth in payrolls (2 percent) and was also the state with the biggest increase in its wage floor ($1.25). Of the two states in this group with the highest overall minimum wage ($9.15), Vermont had job growth just above the national average and Connecticut was just below. West Virginia and Nebraska showed declines in employment in the first six months of this year. In West Virginia it probably reflects the plunge in energy prices.
The mixed data do little to settle the debate on
whether raising the minimum wage impacts employment. Some economists argue that increases have little or no ill effects on hiring and therefore will boost household income and spending. Others say raising the wage floor kills jobs and hurts unskilled and low-paid workers, the very people they’re meant to help.
Comparing the last six months of 2014 with the first half of this year, payroll gains accelerated in seven states and slowed in four. Still, employment only grew as fast as the U.S. average in Arkansas in the last half of 2014.
Legislated increases in the pay floor in Alaska, Delaware and Minnesota didn't take effect at the start of the year, so they were left off the chart. The minimum wage rose automatically in states such as Washington, Oregon and Florida where it is indexed to inflation, and they too were eliminated from the chart because the increases were modest in comparison.