Minimum Wage Increase Proven to Have No Real Negative Impact on Employment

SD Democrats are making a push with the labor unions to raise the minimum wage to $8.50 an hour and then tie the increase to the cost of living adjustment (COLA).  It also raises the wages for people that are tipped employees (which is currently $2.13 an hour) to half of the minimum wage.  Moments after the news was released, the right started the "WHY DO YOU HATE BUSINESSES!" scream.  In fact, Daugaard  came out against it with a common cry of it being a job killer:

"The issue should be based on economics, not politics," Daugaard said in a statement to the Argus Leader. "There needs to be an analysis of how many jobs would be lost."

The shocker is that this has been studied and we actually have several examples of states that have done exactly this proposal.  It turns out that increasing the minimum wage has little to no negative impact on the economy and may actually make the economy stronger in the long run.

A report released in February 2013 examined several studies, including several meta-analysis studies, on the impact of minimum wage increases through out the United States and the impact on employment.

Economists have conducted hundreds of studies of the employment impact of the minimum wage. Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers. (the bolding and underlining are all me)

 The most likely reasons given the article for why you don't see employment factors getting hit include things like lower turnover of employees which saves employers a lot of money and workers improving efficiency due to appreciation for higher pay.  In fact South Dakota business owners agree.  (Smoragiewicz owns Dakota Thyme)

"There will be good things that come from it but a lot of the business owners are going to have to take a close look because it could affect prices and what not,"said Smoragiewicz. 

In the end Smoragiewicz says it will be better off because workers will be happier and work harder. 

 "If people are making a little more they will be happier and work a lot harder,"said Smoragiewicz.

You don't have to rely on studies for proof because there are empirical examples.  Oregon has increased its minimum wage from $8.80 to $8.95 in 2013 because of the COLA established in law when they increased the minimum wage to $8.50 in 2002 by an initiated measure.  It runs out that the law has not destroyed the economy in Oregon.  Poltifact examined a claim made by the National Restaurant Association in March that the minimum wage increase had hurt hiring in the sector.  There response was the claim is FALSE!

But when we looked at data from other states, the correlation just didn’t work. And putting employment and the number of restaurants into context, as Lehner did, we can see that restaurant jobs rise and fall with the health of the national economy, not the state’s minimum wage. Oregon’s per capita restaurant employment is higher than the national average, in spite of having a higher minimum wage. 

We rate the statement False.

Another example of how this is working in a small state like South Dakota is Vermont.  It seems that most small business personal are not too concerned with the yearly increases in wages when adjusted to COLA.  

In Vermont, where the minimum wage is currently $8.60 and has been above the federal level and indexed to inflation since 2007, small business owners don't think much about the annual wage increases anymore, says Betsy Bishop, president of the Vermont Chamber of Commerce. 

"This has created a level of certainty about wage rates both for employees who know they will be getting this particular wage increase, and for employers, who can plan for the increases," Bishop says.

 You can look to Vermont for even more data to support raising the minimum wage:

In Nevada, where the national minimum of $7.25 an hour applies, the jobless rate is 10.2 per cent. In Vermont, where the minimum wage is $8.60 an hour, the unemployment rate is 5.1 per cent. What these figures tell us is that other factors, such as the overall state of the economy and how local industries are doing, matter a lot more for employment than the level of the minimum wage does.

There is so much more empirical data and evidence that raising the minimum wage to the level suggested by the Democrats will not kill jobs.  Mr. Daugaard, I don't think we need to wait anymore.  Based on the economics, it is the right thing to do for this state.  Don't let fear rule the day.  That is all that people against this minimum wage increase have.