Confession: I tend to understand some issues on the level of logic -of, even, common sense. A prohibition (which is what a minimum wage law is, forbidding payment at a rate below the "minimum") doesn't spur productivity, and it's from increased productivity that we get general higher wages and wealth and progress itself.
Sure, there are "studies" that indicate otherwise. But, we don't conduct field studies amongst chimps arranging their bananas to prove 2 + 2 = 4. If an experiment of chimp-arranged bananas comes up with 3, I look for the chimp with the banana-eating grin.
Anyway, there's this new study about employment from 2007-2009, when the economy went into the toilet, and right after the national minimum wage was upped from $5.15 to $7.25 per hour.
The study's authors look at employment broadly. They pride themselves on their careful assessment of "the minimum wage from an anti-poverty perspective" and "its effects on the broader population of low-skilled workers. . . ."
Off the top of my head, I marvel that anyone can distinguish one cause for unemployment (financial crash) from another (minimum wage law), but the authors make a pretty convincing case.
Their conclusion? "Our best estimate is that these minimum wage increases reduced the employment-to-population ratio of working age adults by 0.7 percentage points. This accounts for 14 percent of the total decline over the relevant time period."
So, yes, they say, the last minimum wage hike led to higher unemployment.
Which is what I would suspect. Because of, you know . . . Common Sense. I'm Paul Jacob.
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Paul Jacobs is author of Common Sense which provides daily commentary about the issues impacting America — and about the citizens who are doing something about them. He is also President of the Liberty Initiative Fund (LIFe) as well as Citizens in Charge Foundation. Jacobs is a contributing author on the ARRA News Service.
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