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Analysis: Impact Of Raised Minimum Wage In 18 States

A recent analysis summarized by progressive think tank Center for Economic and Policy Research found that 18 states that raised their minimum wage above the federal level are continuing to have their cake and eat it too, enjoying wage increases for low-income workers without raising unemployment rates.

On Dec. 2, the think tank released its summary of analysis originally done by the White House Council of Economic Advisors of states that had raised their minimum wage threshold since 2014. The study included 18 states as well as Washington, D.C., City Lab reports.

The current federal minimum wage is $7.25 per hour. Examining the states that had opted to raise that rate, the authors found these areas had seen "substantial increases in average wages for workers in low-wage jobs, helping to reverse a pattern of stagnant or falling real wages in preceding years."

While critics of raising the minimum wage contend that raising the pay threshold will result in business owners laying off workers or cutting workers' hours, the authors added that these states exhibited no "sign of an impact on employment or hours worked."

The CEA analysts referred to the Bureau of Labor Statistics' data on workers in the leisure and hospitality industries. Since 2014, their weekly earnings have grown by roughly 6.6 percent in the 18 states that had upped their minimum wage.

Meanwhile, the Census Bureau's statistics on employment indicated that employment in these states had remained stable over the past two years.

The analysis concluded states that had raised their minimum wage in 2014 have seen low-income workers' income grow while maintaining similar employment numbers compared to states that continue to keep wages at the federal minimum.

While this analysis found favorable evidence that low-wage Americans can get a raise without an impact on rates of employment, many lawmakers continue to be wary of minimum wage hikes.

On Dec. 7, the Ohio Legislature voted for a law to forbid any city in the state from raising local minimum wages. The move effectively curtailed Cleveland's planned 2017 referendum on increasing its minimum wage to $15 an hour, Fortune reports.

While Ohio currently has a statewide minimum wage of $8.10 per hour, Republican state Rep. Ryan Smith of Ohio said he and his colleagues had opted to deny the state's cities a chance to hike wages, claiming it would keep the state "business-friendly."

While both Ohio houses approved the bill, it has yet to be signed into law by Republican Ohio Gov. John Kasich.

The view that raising the minimum wage is counterproductive is likely to become federal policy. President-elect Donald Trump's appointee for secretary of labor, Carl's Jr. CEO Andrew Puzder, is an outspoken critic of raising minimum wages, according to The New York Times.

Puzder has stated he opposes upping the minimum wage "to the point where lower-skilled workers, working-class Americans, young people, minorities, are losing the jobs they need to get on the ladder of success."

Sources: City Lab, Fortune, The New York Times / Photo credit: Tax Credits/Flickr

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