San Francisco is another with similar results.
I just picked two that I knew had a minimum wage significantly above the federal one. i-node and I have been doing this for a while. For him, wages are totally inelastic. Any increase, however small, triggers a number of bad economic things that, say the price of tomatoes during a drought does not. Now certainly if the rise in prices is too much, for labor or tomatoes, then you can see an effect.
And he is right, economic conventional wisdom was with his side. In the 1970s. Turns out, when you control for demographics and other issues, small increases have little or no effect on the unemployment rate. Boosting the minimum wage in, say Mississippi to $15 in one fell swoop might increase unemployment. But increases in minimum wage tends to be done in steps over several years.
However, even a relatively large increase in a short period of time can have minimal effect. For example, Kansas. Until 2010, their minimum wage was $2.65 and jumped to $7.25. And their economy was fine afterwards. Now it very well could be that few people were paying much below the federal minimum wage, but I haven't been able to find any figures on that. Of course, Kansas is a basket case right now, but that has little to do with the minimum wage and everything to do with implementing the economic policies(Laffer is an adviser to Brownback) that i-node advocates. But that is a different argument... |
