American studies show that minimum wage rises not only don’t harm employment, they may even increase it.

The US has a federal minimum wage of US$7.25 per hour. But states and even cities can set their own minimums, and in recent years many have increased minimum wages significantly. There are now 10 major cities in the US that have minimum wages between US$12-15.

An academic study conducted last year by the Institute for Research on Labour and Employment at Berkeley University (September 2018) looked at the impact of these minimum wage increases. It said they did not lead to any “significant negative employment effects”.

One state – Arkansas – increased the minimum wage to US$8.50 in 2014 – well above the minimum wage in the states surrounding it.

“From 2014 to 2017, unemployment in Arkansas dropped from six per cent to 3.7 per cent,” said the researchers.

This was Arkansas’ lowest unemployment rate since 1976.

So good were the economic results that Arkansas voted to further increase its minimum wage to US$11 by 2021.

Another study found a further 25 US states had increased their minimum wage levels since 2013.