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Study: States with higher minimum wages had higher unemployment

Study: States with higher minimum wages had higher unemployment

A new study by the free-market American Action Forum found that states with minimum wages higher than the federal minimum suffer from higher unemployment.

Researchers looked at labor data from both the nineteen states that as of 2013 had enforced minimum wages above $7.25 per hour and the thirty-one states that had minimum wages equal to $7.25.

Overall, they found that just a $1 increase in the minimum wage was “associated with a 1.48 percentage point increase in the unemployment rate,” and a “0.18 percentage point decrease in the net job growth rate.”

A higher minimum wage thus led to the unemployment of 747,700 workers and a job growth reduction of 83,300 jobs, the study claims.

The study noted that minimum wage hikes especially took a toll on the employment opportunities for young and low-skill workers.

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