The Minimum Wage and Job Creation

Source: Massachusetts Budget and Policy Center, August 15, 2012

This fact sheet is the latest in a series of MassBudget reports addressing various aspects of the Massachusetts minimum wage.

Raising the state minimum wage results in higher pay rates for low-wage workers, but how does it affect jobs and the economy? This is a key question whenever proposals to increase the minimum wage arise. Some argue that minimum wage increases do not lead to job loss and suggest that raising the minimum wage enhances worker morale and productivity, while others argue that raising the minimum wage causes employers to cut jobs and working hours for low-wage workers. Our analysis of job growth in Massachusetts over almost two decades–during which the state minimum wage increased several times–provides evidence that these increases have not impeded job growth. Likewise, the latest economic studies that address this question and that are summarized below also show that minimum wage increases do not have a negative effect on employment.

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