Minimum Wage


For years I’ve argued that the minimum wage was a wrong minded philosophy.  This has gone back for at least 14-20 years.  For much of that time, my arguments were more along the line of “There are many people in this world how aren’t WORTH the minimum wage.”  Parallel to that argument, I would challenge people I knew who supported the idea with finding 10  jobs [I lived in Seattle at the time] that actually DIDN’T pay the minimum wage.

The point is; I’ve long opposed the idea that businesses should have t pay people more than they’re worth.

But it hasn’t been until the advent of “Everything on-line” and  the recent Presidential election that motivated me into studying the minimum wage.

So I try to convince folks that the minimum wage acts a jobs destroyer, not a wealth builder.  In fact, the people that are supposed to benefit from the minimum wage are the ones most hard hit as it’s implemented.  I’ve told cute stories about beer and other stories about real life job markets.  But no data.

We;;, I’ve been working on showing what the minimum wage does to teens overall and then black teens.  I was turned onto the fact that the minimum wage is especially destructive to the most in need my Thomas Sowell; a gifted Economist.  What I’ve been trying to do is demonstrate how unemployment reacts to the minimum wage increases.  M.J Perry at Carpe Diem pushed me to finish it.

Just look at the devastating impact that raises in the minimum wage have on the teen population.  The minimum wage is on the right, the unemployment rate on the left:

It’s remarkable.  With the exception of 1997, the unemployment rate of teens goes UP as the minimum wage goes up.

No matter what you are told, there is only one truth:

Bottom Line: As much as politicians and other advocates of the minimum wage might pretend otherwise, the laws of supply and demand (like the law of gravity) are NOT optional.

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6 comments
  1. Jared said:

    I’d like to see more complete data on the relation between unemployment and minimum wage. I generally accept the premise that unemployment rises with hikes in the minimum wage, but I’m unconvinced as to the cause. Maybe hikes in the minimum wage occur during cycles where unemployment would rise regardless? What does 10yr or 50yr of data look like?

    • pino said:

      What does 10yr or 50yr of data look like?

      The graph I included is a 20 year graph; it goes back to 1990. I’m working on older data as well as the impact the minimum wage has on black teens; a group that I feel is even more at risk.

  2. Jared said:

    : P

    Right… 1990 was 20 years ago! Thanks, pino!

    • pino said:

      Right… 1990 was 20 years ago! Thanks, pino!

      No worries. You’re right to ask that question. From 1991 to 1997, as the minimum wage went UP the unemployment for teens went DOWN.

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