Historically Low Minimum Wage, Historically Low Unemployment

The Bureau of Labor Statistics (BLS) recently released its unemployment rate for the year and a look at the report, see here, shows that many states (15 or so) have reached or surpassed their historically lowest unemployment level on record.

Is it a mere coincidence that at a time when the minimum wage is at a historic low that we also find many states dropping to some of their lowest levels of unemployment in history? Those who advocate for a minimum wage would say yes, those of us who know the minimum wage increases unemployment would say no the two go hand in hand.

Again, I must repeat, the fight to increase the minimum wage is not about the poor, it is about politics and it is politics at the expense of the poor and minority.

4 Responses to “Historically Low Minimum Wage, Historically Low Unemployment”

  1. LaLinda says:

    A restaurant owner friend of ours is sweating the minimum wage rate….it seems that it hurts the small businesses the most. He will have to lay-off a few to be able to afford paying the rate hike to the rest. He will be operating his business with less people now. Somehow not too many people understand that the most hurt are the small business owners. Not to mention the college student who was working to help put himself/herself through.

  2. jk says:

    Oh yeah, the low minimum wage cause the low unemployment in 2007… and a similar wage in 2009 is causing high unemployment!

    LOL. Sorry dude. What created low unemployment was the increased demand created by the “easy credit” of toxic mortgages and home equity loans. The credit was easy because the market was producing a bubble in house prices, and the irresponsible banks and rich people were participating.

    @LALinda – I bet the restaurant is having a harder time dealing with this new “no wage at all” thing going on today.

  3. jk,

    I am curious…what do you think of this post? That is where I laid out the real argument against the minimum wage.

  4. jk says:

    I’ll reply in more detail when i have time. I think that it’s true that a wage floor will cause some people to be unable to enter the market. That said, there are a lot of other factors affecting unemployment, and the MW is not the main cause, nor will repealing it effect a “cure”.

    The argument against the MW is largely rhetorical, and doesn’t seem to be based in reality. You can put together an elaborate, rational, inductive argument, but that doesn’t mean it’ll work out that way.

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