by Ben Gitis
American Action Forum
April 02, 2014
In 2013, laws to raise the minimum wage were approved in five states. To date in 2014, Connecticut and Delaware approved laws to raise the state minimum wage and over 30 states are considering minimum wage hikes. Policymakers must understand the labor market implications of such a policy. Nineteen states enforced minimum wages above the federal minimum of $7.25 per hour and thirty-one had minimum wages equal to $7.25 in 2013. Analysis finds that in 2013, a $1 increase in the minimum wage was associated with a 1.48 percentage point increase in the unemployment rate, a 0.18 percentage point decrease in the net job growth rate, a 4.67 percentage point increase in the teenage unemployment rate, and a 4.01 percentage point decrease in the teenage net job growth rate. Consequently, high state minimum wages increased unemployment by 747,700 workers and reduced job growth by 83,300 jobs.



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