Minimum-Wage Hikes Hit Hiring In California, Arkansas

By JED GRAHAM of Investor's Business Daily.

"California shed jobs in January for the first time since mid-2011, as the minimum wage jumped $1 to $10 an hour, while Arkansas suffered its worst job loss in any month since May 2011, preliminary Labor Department data show.

Nationwide, just 2 in 5 states suffered employment losses in January. But among states where the minimum wage rose at least 50 cents an hour, 7 of 8 lost jobs, Hawaii being the exception.



The seasonally adjusted data, which are based on a sample of employers, may still be revised later after a much more comprehensive quarterly census. Yet although the evidence linking state job losses in January to a higher minimum wage is only circumstantial, the potential negative effect of mandated wage hikes on people they are supposed to help makes it important to keep a close eye on incoming data.

Arkansas, which stood out in its region of the country by hiking its wage 50 cents to $8.25 an hour, may have suffered the biggest fallout among states imposing wage hikes. Not only did it report a loss of 5,100 jobs, but the average workweek for private-sector workers sank to 33.7 hours, down from 34.6 hours a year earlier.

Factoring in that loss of work hours, January’s employment loss was even worse for Arkansas than for South Carolina, which lost a greater percentage of jobs (0.5% vs. 0.4%) though it didn’t hike its minimum wage.

California’s net job loss of 1,500 overall — with 4,300 lost jobs in the private sector, as public sector gains offset some of the private losses — stands out not because it was so severe, but because the state had seen job gains for 54 months straight. West Virginia, where job losses have been all too common, lost 2,200 jobs, or 0.3%, in January as its minimum wage rose 75 cents to $8.75 an hour.

Massachusetts shed 2,500 jobs after hiking its minimum wage from $9 to $10 an hour. Nebraska boosted its wage from $8 to $9 an hour but only saw a loss of 100 jobs."