Job growth in living wage states higher than minimum wage peers


Use DarkSydoTheMoon@aol.com

Use DarkSydOtheMoon@aol.com

If I collect a little more in donations this week, the blegging can stop. My Paypal email is Darksydothemoon-at-aol-com. Please chip in if possible to your gentle, progressive atheist activist. Sadly, there’s just no career path and little in the way of tangible benefits doing what I do here at FTB. Speaking of benefits, guess what happens when the minimum wage is raised to something closer to livable and guess what economic ideology is being shown as dead wrong on that score?

Philly.com – The 13 U.S. states that raised their minimum wages at the beginning of this year are adding jobs at a faster pace than those that did not, providing some counter-intuitive fuel to the debate over what impact a higher minimum has on hiring trends.

Many business groups argue that raising the minimum wage discourages job growth by increasing the cost of hiring. A Congressional Budget Office report earlier this year lent some support for that view. It found that a minimum wage of $10.10 an hour, as President Obama supports, could cost 500,000 jobs nationwide.

But the state-by-state hiring data, released Friday by the Labor Department, provides ammunition to those who disagree. Economists who support a higher minimum say the figures are encouraging, though they acknowledge they don’t establish a cause and effect. There are many possible reasons hiring might accelerate in a particular state.

Well, duh. Maybe if you’re an uninformed layperson who accepts your wingnut boss’s boss’s mindless parroting of talking points as if they were revealed wisdom, this comes as a surprise. For anyone else with half a brain or a smidgen of experience actually trying to survive on eight or nine bucks an hour, its common sense. Give struggling workers a few extra bucks every month and they’re not going to stash the money in a tax-free offshore coffee can or run down to the local Merril Lynch office and open a wealth builder account. It’s going to be spent, as fast as its made, mostly on necessities, maybe there’ll be enough left over for an occasional super luxury, like a cappuccino or a new ringtone. Thus the economy blossoms up and prosperity flows more equitably, including to more rich people, instead of trickling down in dwindling droplets into a few lucky, outstretched hands.

Apologists for the richest point-zero-one percent have no problem understanding this basic economic fact, when it involves an increase in military spending, or tax cuts and corporate welfare for their pampered clients. But when it involves people who actually work for a living having more a tiny bit money to spend or save, Upton Sinclair is in full command: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Comments

  1. smrnda says

    The idea that raising minimum wage ‘costs jobs’ is based on making a theoretical argument, whereas in reality economics is far more complicated than the simplified and politically motivated models and thought experiments. The empirical data suggests otherwise, and if it goes against the standard talking points, then the talking points are wrong.

  2. says

    Unfortunately, this is what “raising the minimum wage” was like (from your article):

    “The number of jobs in Florida has risen 1.6 percent this year, the most of the 13 states with higher minimums. Its minimum rose to $7.93 an hour from $7.79 last year.”

    You’re talking about an improvement of about 14 cents an hour in Florida… (and this very modest 3% raise was typical for most of the states after years of NOT raising the minimum wage.). And as the article repeatedly pointed out, there are a lot of other factors that were in play that could account for the econiomic improvements.

    What is needed is to get the minimum rate back on par to what was paid out in the 1960’s and 1970’s before “Reagonomics Trickle down supply side” Bullshit started, so you need to ratchet up the minimum wage rates to something like $12/hr. just to adjust for decades of inflation. (For the federal minimum wage in constant dollar value, see http://www.infoplease.com/ipa/A0774473.html ).

  3. krambc says

    Minor changes to hourly minimum wages – or even living wages – can’t address the crisis in labour market pricing in globalized economic systems.

    Adam Smith noted in 1775 that employers conspire to keep wages low:

    Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate… It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms.”

    Former chattel slave Frederick Douglas:

    experience demonstrates that there may be a slavery of wages only a little less galling and crushing in its effects than chattel slavery, and that this slavery of wages must go down with the other”

    But we’re starting to see glimpses of a way out of the disconnect between wages and work through a
    guaranteed minimum annual – not hourly – income; even from a conservative .

  4. krambc says

    grrrr … block quote failure. My bad. Should be (with fixed conservative link) :

    Former chattel slave Frederick Douglas:

    experience demonstrates that there may be a slavery of wages only a little less galling and crushing in its effects than chattel slavery, and that this slavery of wages must go down with the other”

    But we’re starting to see glimpses of a way out of the disconnect between wages and work through a
    guaranteed minimum annual – not hourly – income; even from
    a conservative
    .

  5. lorn says

    IMHO the key understanding is that there is a lot of difference between wealth and prosperity. IF you look at just national wealth or average wealth within a group a you can claim to have a wealthy group, or society, if a fraction of one percent have billions of dollars and everyone else is starving. Wealth is just a measure of money within a group without regard for how it moves, if it moves, or it is does anything. It is simple mathematics.

    On the other hand prosperity might best be characterized by the movement of money within a group. Fact is that poor people move money around. The quantities are smaller but there are a hell of a lot more poor people than rich and the money they spend changes hands more frequently.

    A higher minimum wage gets money into the hands of people who will spend it, spread it around, and be involved in a lot of transaction in a short span of time. People spending money rapidly in small amounts tends to stimulate the economy and create jobs.

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