THE MINIMUM WAGE. To follow up on Matt's post below, while reasonable people can disagree on the impact of minimum wage laws, it's time they stopped. William Niskanen, in arguing against a federal boost to the wage, trots out the same old canards about wage increases decimating jobs. And yes, if you jack the wage up to $16 an hour, jobs will be lost. But up to $7 over a period of years? The evidence doesn't back him up. And, luckily, it's so easy to check that you folks can play along at home. Just crosscheck this list of state minimum wage laws with this rundown of state unemployment rates. The lowest unemployment rate in the country is Hawaii's 2.8 percent, which somehow survives with their $6.75 minimum wage. Second lowest? Florida, with a luxurious $6.40 per hour. Vermont, resting comfortably at number 5, has a minimum wage of $7.40! And the very highest unemployment in the nation? Mississippi, with no minimum wage laws at all.
And this is how it is. The minimum wage, of course, doesn't decide employment on its own. Michigan has a decent wage floor, but the destruction of their manufacturing sector left them with a high unemployment rate. And Mississippi's problems aren't related solely to their laughably low labor standards. But any attempt to correlate minimum wage increases with joblessness falls on its face. When Clinton raised the wage in the mid-�90s, low income employment skyrocketed. Some catastrophe. And we can take this as far back as folks want. Check this graph, showing the real value of the minimum wage (now at a historical low). Its peak was 1968. The unemployment rate in �68? A brilliantly low 3.5 percent.
As Brad DeLong would say: Raise the minimum wage. Raise it now.
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