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The Center for American Progress reports:
Think a higher minimum wage is a job killer? Think again: The states that raised their minimum wages on January 1 have seen higher employment growth since then than the states that kept theirs at the same rate.
The minimum wage went up in 13 states Arizona, Connecticut, Colorado, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont, and Washington either thanks to automatic increases in line with inflation or new legislation, as Ben Wolcott reports in his analysis at the Center for Economic and Policy Research. The average change in employment for those states over the first five months of the year as compared with the last five of 2013 is 0.99 percent, while the average for all remaining states is 0.68 percent.
Digging deeper, all but one of those states are experiencing increases in employment, and nine of them have seen growth above the median rate.
(Score: 3, Informative) by geb on Friday July 04 2014, @04:41PM
Large, unpredictable shifts in economic environment do kill jobs, and that would apply no matter what the change was. Investors don't like to see a business model that could be wiped out by somebody else's arbitrary decision a few years down the line. A business-friendly government is a slow moving government.
(Score: 2) by khallow on Friday July 04 2014, @04:46PM
That does fit with my observation [soylentnews.org] that the nine states with modest, automatic increases in minimum wage did much better over this narrow time period than the states with legislated, larger changes in minimum wage.
(Score: 2) by frojack on Friday July 04 2014, @06:03PM
Your observation works, but only because it A) assumes correlation = causation, and B) has the cart before the horse.
Point B is especially important here, because small automatic raises in minimum wage are always tied to other measures of economic growth, jobs, market conditions, etc.
So the wage increase is AFTER the already proven growth, rather than before. Wage increase is an effect, not a cause, and it is still inflationary.
And more importantly, in a raising economy, wages have already been bid up, because the burger flippers and waitresses can find other better paying jobs. Those states that use automatic raises in minimum wage are are always following the market derived minimum, not leading it. If anything, these states are only setting a ratchet [wikipedia.org].
Further, a ratcheting minimum wage, when there is an economic downturn like the one we are still climbing out of, simply guarantees that more people will lose their jobs earlier, and be without jobs longer.
No, you are mistaken. I've always had this sig.
(Score: 2) by khallow on Friday July 04 2014, @06:14PM
Correlation is an indication of possible causation. Or it could be an indication of a modestly uncommon cluster that has no actual statistical significance. My observation is an observation whether it's of actual phenomena or spurious coincidence.
(Score: 2) by frojack on Friday July 04 2014, @08:34PM
Way to build confidence! You Go Girl!
No, you are mistaken. I've always had this sig.
(Score: 2) by khallow on Friday July 04 2014, @11:34PM
I didn't build confidence in the first place. Merely, that my original observation fit with someone's scenario. If there really was a causation as a result of the scenario that I was replying to then one would expect to see the correlation of my observation.
(Score: 2) by BasilBrush on Friday July 04 2014, @10:11PM
Unfortunately the worst paid are invariably the last to benefit from an improving economy. Minimum wages have a direct effect on reducing poverty, whilst the free market effect is more to reward the already rich, whilst leaving the poor where they are.
So you believe, yet all the evidence is to the contrary.
Hurrah! Quoting works now!
(Score: 0) by Anonymous Coward on Friday July 04 2014, @06:08PM
Since when did investors and businesses give a shit about anything further away from this quarter's profit?
(Score: 3, Insightful) by geb on Friday July 04 2014, @06:12PM
There are plenty of investors in it for the long term. Pension providers would be one of the big ones.
(Score: 2) by BasilBrush on Friday July 04 2014, @10:05PM
Countries should not be run simply according to the wishes of investors. Investors should be worth one vote - no more and no less than any other adult.
Hurrah! Quoting works now!
(Score: 2) by geb on Friday July 04 2014, @11:08PM
I wasn't proposing that at all. Pro-business has unfortunately come to mean anti-everybody-else, but there are still things that can be done to benefit everybody equally. Increasing employment is one of them.
(Score: 2) by BasilBrush on Saturday July 05 2014, @05:06PM
But there is no evidence that a minimum wage increases unemployment. Quite the opposite in fact.
Hurrah! Quoting works now!
(Score: 2) by khallow on Sunday July 06 2014, @12:34AM
Aside from the usual model of supply and demand: increase the cost of something and the demand for it drops.
(Score: 2) by compro01 on Sunday July 06 2014, @05:24AM
If by "usual" you mean "simplistic to the point of being pretty much totally wrong", sure. Assuming a pure supply/demand model for an economy is like doing physics calculations assuming a frictionless vacuum. It makes the math real simple, but the results are rather unlikely to be applicable to reality.
(Score: 2) by khallow on Monday July 07 2014, @08:31PM
Hasn't been my experience. Having actually played around with markets and economics of all sorts, I assure you this simplistic model works quite well. And I notice no one gives any reason for supposing that labor is somehow different aside from wishful thinking, like the propaganda of Henry Ford's "five dollar day" (the mythical idea that paying your employees more means your customers, who aren't actually your employees, buy more of your stuff).
(Score: 2) by compro01 on Monday July 07 2014, @09:39PM
Because, at least in the relatively short term, there's a floor on the demand for labour, and an efficiently running business tends to be operating pretty close to it. You can't just cut staff nilly willy and still operate, so you need to have staff, pretty much regardless of how much it costs.
Over the long term, you can reduce staffing needs via automation, etc., but this has been happening whether or not the minimum wage is increased.
(Score: 2) by BasilBrush on Monday July 07 2014, @05:54PM
Two problems with your argument:
1) That's not a rule. Sometimes increasing the cost of something increases demand.
2) Prices more often reflect what the market will bear, than cost of labour.
Hurrah! Quoting works now!
(Score: 2) by khallow on Monday July 07 2014, @08:27PM
This model became a "rule" because it was usually right. Why should we expect, aside from wishful thinking, that labor costs are the exception to the rule? Especially, when labor markets are as competitive as they are in the world today?
Things don't end up on the market, if they cost more to produce than the market will bear. And reinvestment in a process (such as putting money into increasing production of something at a lower cost) depends on how much profit from the process there is to reinvest.