Every time we raise the minimum wage, the number of jobless people increases.
At the Fox Business Network debate, it didn’t take long for the topic of the minimum wage to come up. During a back-and-forth with the moderators, Republican presidential candidate Ben Carson urged caution on raising the minimum wage, saying, "People need to be educated on the minimum wage. Every time we raise the minimum wage, the number of jobless people increases." We checked a similar claim by Sen. Ben Cardin, D-Md. In November 2014, Cardin made the opposite case, claiming that "every time we've increased the minimum wage, we've seen a growth in jobs." We rated Cardin’s claim Mostly False, after determining that during the 12 months following each of the 11 minimum wage increases since 1978, about half produced a net gain in jobs and about half produced a net loss of jobs. In this case, we decided we couldn’t rely on the exact same data, since Cardin referred to a growth in jobs, while Carson referred to an increase in joblessness. Those aren’t exactly the same things, though the Bureau of Labor Statistics calculates both metrics. So we used the same methodology to look at the 12-month changes in unemployment level after those 11 minimum-wage hikes. The chart below shows what we found: Year of minimum wage increase New minimum wage Change in number of people unemployed over next 12 months Was a recession going on during the 12-month period? 1978 $2.65 Down 380,000 No 1979 $2.90 Up 574,000 Yes 1980 $3.10 Up 1,388,000 Yes 1981 $3.35 Up 1,326,000 Yes 1990 $3.80 Up 1,642,000 Yes 1991 $4.25 Up 976,000 No 1996 $4.75 Down 577,000 No 1997 $5.15 Down 356,000 No 2007 $5.85 Up 1,788,000 Yes 2008 $6.55 Up 5,664,000 Yes 2009 $7.25 Down 89,000 No The headline here is that joblessness rose after a minimum-wage hike more than half the time -- seven out of 11 occasions -- but fell four times. Since joblessness fell some of the time, it means that Carson’s sweeping claim -- that joblessness rises "every time" the minimum wage goes up is off-base. But there’s another factor that casts additional doubt on his assertion. As it happened, there was a recession under way during six of the 11 periods we studied. During each of those periods, joblessness rose after the minimum wage went up. This is not surprising -- but it does cast into doubt the cause and effect behind the rise in joblessness. The impact of a recession does, at the very least, raise questions about whether a minimum wage hike in and of itself caused joblessness. If you look instead at the five wage hikes that occurred when a recovery was under way, joblessness declined four of those times. The only exception was the 1991 wage hike, which took effect soon after a recovery began. Finally, we should note that economists are split over what effect a minimum wage hike has on job growth. There’s some research that shows raising the minimum wage negatively impacts job growth, and a lot that shows it has an insignificant effect. Our ruling Carson said, "Every time we raise the minimum wage, the number of jobless people increases." If you look at the 12-month period following every minimum-wage hike since 1978, joblessness did rise on seven occasions, but it fell on four occasions, undercutting his sweeping claim. In addition, it’s not at all clear that a minimum-wage hike was the primary culprit for the periods in which joblessness rose, since those periods also coincided with broader recessions in the economy. We rate his claim False.
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