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Data Bank Focus: Paying Well

January 13, 2012
Related Topics: Top Stories - Frontpage, Compensation

San Francisco's new minimum wage of $10.24 an hour, the highest in the country, went into effect Jan. 1. It exceeds the federal government's minimum wage of $7.25 by almost $3. Oregon and Washington state also raised their minimum wage for 2012 to $8.80 and $9.04, respectively.

The expected outcry from employers is that the increases will force them to lay off staff. But how does minimum wage really affect unemployment for an area?

A number of states and a few cities have set a minimum wage that exceeds the federal government's. A look at 12 of the states and areas with the highest minimum wage shows that eight out of 12 have an unemployment rate lower than the national rate. A number of factors affect unemployment; a high minimum wage does not appear to have a major impact.

Workforce Management, January 2012, p. 12-13  

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