Reality Check

Reality Check

Vets the truthfulness of claims and measures the efficacy of public policy

Obama Links Minimum Wage Increases to Job Growth, and He’s Not Completely Right Nor Wrong

View Comments (
)
|
Email
|
Print

    NEWSLETTERS

    In this edition of Reality Check, Sam Brock fact-checks the president's claim that raising the minimum wage has boosted job growth. (Published Tuesday, Sep 2, 2014)

    What effect does raising the minimum wage have on jobs? It’s an issue that has long been debated in politics, with Republicans arguing that it “kills jobs” and Democrats saying it helps the broader economy.

    Monday, at a Labor Day rally, President Barack Obama gave a fiery speech in which he claimed that it not only helps the economy at large, but in states that have raised wages, there has been more job growth than in the states that haven’t budged on the issue.

    Is the president’s claim true? Yes and no – it just depends on what data is used.

    Here is the quote in question from Monday’s speech: “You know, opponents they'll say, well, minimum wage, they're gonna kill jobs. Except it turns out that the states where the minimum wage has gone up this year had higher job growth than the states that didn't raise the minimum wage. That's the facts.”

    Since the start of the year, there have been 13 states that have boosted their minimum wage. And, according to a recent Associated Press article on U.S. Labor Department data, the “number of jobs grew an average of 0.85 percent” in those states. “The average for the other 37 states was 0.61 percent.”

    This is the data the president was referring to when he talked about “higher job growth.”

    However, job growth is typically associated with overall changes in total employment and not the rate of change. In other words, did the 13 states with minimum wage increases outpace the other 37 states in the total number of jobs created?

    NBC Bay Area dove into the trove of data available through the Labor Department to figure out the answer to this question. The result? Over 434,000 total jobs were created in the 13 states where wages increased. In the 37 other states, more than 897,000 total jobs were created.

    While this is by no means an example of what was widely showcased in the famed book “How to Lie with Statistics,” it is a good example of how varying datasets can be used to tell different stories about the same situation.