NCPA - National Center for Policy Analysis

High Unemployment Despite High Minimum Wage

January 23, 2004

Washington, Oregon and Alaska are among the five states with the highest unemployment rates, despite having the highest minimum wages in the nation, say experts.

Washington state's unemployment rate is 15 percent higher than the national average and 42 percent higher than it was five years ago when the state introduced a minimum wage higher than the federal minimum:

  • Approximately 16 Washington cities and counties with a population of at least 10,000 posted an unemployment rate of between 9 percent and more than 14 percent last year.
  • More than 1.2 million people now live in these high unemployment areas with unemployment rates that have not been experienced nationwide since the recession of the early '80s.

Despite the state's relentless high unemployment, the state's minimum wage is set to rise for the fifth time in as many years on Jan.1, making it 39 percent higher than the federal minimum -- the highest minimum wage in the nation.

Source: Craig Garthwaite (Employment Policies Institute), "High Minimum Wage = High Unemployment," The Seattle Post-Intelligencer, December 29, 2003; based upon David Neumark, "Effects of Minimum Wages on Teenage Employment, Enrollment and Idleness," Michigan State University, August 1995 and Peter Brandon, "Jobs Taken by Mothers Moving from Welfare to Work: And the Effects of Minimum Wages on the Transition," University of Wisconsin, February 1995.


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