The minimum wage was a winner in last night’s election. In the six states (Montana, Ohio, Arizona, Colorado, Missouri and Nevada) with ballot measures to raise the minimum wage, the ballot measures passed. Even better, all six laws are indexed to inflation – meaning that the MW in those states will automatically go up over time, rather than having to be fought for again and again.
Here’s a summary table, from this Economic Policy Institute page:
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If trends in these six states mirror national trends, then about 60% of the 1.5 million workers getting the raise will be women. A disproportionate number of the 1.5 million will be people of color.
Interestingly, this is the first time in US history that the majority of states have state-level minimum wages which are higher than the Federal minimum wage. That’s a reflection of how much the Federal government has allowed the real value of the minimum wage to drop, forcing the states to step in:
(Curtsy: Angry Bear).
Plus, new overlord Pelosi has said that raising the minimum wage will be at the top of the Democrats’ national agenda (one of a bunch of items at the top, admittedly). Fresh from a electorial beating, Republicans won’t have much stomach for fighting a minimum wage increase – polls show that raising the minimum wage is popular with voters of both parties.
A couple of links:
Dean Baker points out that when restaurant owners say that raising the minimum wage would hurt them, and anyway waiters may a ton in tips, the numbers don’t add up.
This Economic Policy Institute brief from 1999 — “The Minimum Wage Increase: A Working Woman’s Issue” — is, sadly, still current today. EPI has a bunch of good articles about the minimum wage, by the way.
[Crossposted at Creative Destruction. If your comments aren’t being approved here, try there.]
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I can’t help but wonder people like Pelosi and John Kerry are in favor of raising the minimum wage when study after study concludes that any increase bigger than a couple of points causes unemployment and results in a net loss for low-income workers.
I think there are three reasons. They know a minimum wage hike appears to help low-income workers. They know that anyone who is left unemployed by the increase probably won’t be able to trace their joblessness back to the candidate. They know that raising the minimum wage provides a big revenue boost for the federal government and makes balancing the budget easier.
Actually, that’s not true. Most recent studies, such as this one, have found that raising the minimum wage has little or no impact on unemployment. In particular, studies based on empirical data tend to find that the minimum wage doesn’t affect unemployment.
So what studies are you referring to? Got any cites?
Finally, I don’t see how it’s possible for a minimum wage to both be a net loss for workers, and to provide a big revenue boost for the federal government.
I do like the indexing– I know that requesting indexing was what derailed California’s minimum wage increase. The not having to fight it again and again would be a huge plus.
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While I’m not sure about raising the minimum wage per se, indexing to me makes perfect sense. If you’re going to have a minimum wage, it shouldn’t have stealth planned obsolescence built into it.
Minimum wage is best left to the states. Where the economy is hot and growing raise the minimum wage. Where it is not so hot leave it be.
In all of the numerous arguments for and against the minimum wage. I have not seen anyone examine a statistical oddity.
Immigration destinations seem to be correlated with the minimum wage. States with higher than the federal minimums appear to attract higher proportions of the legal as well as illegal immigrants.
70% of the legal immigrants have taken up residence in the eighteen states that currently mandate minimum wages above the federal minimum, states representing only 49% of the nation’s total population.
Further, six states have attracted 51% of the total illegal immigrant population even though these states represent only 34% of the total population in the U.S.
U.S. employers must pay the minimum wage and legally cannot hire illegals. Maybe the increase in fradulant documentation indicates that illegals are receiving the minimum wage.
It is reasonable to believe the illegals are behaving as their legal counterparts…following the money.
Here’s a guess: Immigrant populations tend to be more liberal (although there are some exceptions). Therefore, states which are major immigrant centers – such as New York and California – tend to be more liberal. More liberal states are more likely to raise the minimum wage.
Do you mean “legal immigrants” to mean “naturalized citizens” or simply “legally in the U.S.”? Obviously the latter category can’t vote (well, in theory at least), so their views wouldn’t affect the wage.
The Nevada referendum was double-edged. Also approved was a measure forcing bars that serve food to now choose between continuing to allow smoking or continuing to serve food. Since the bulk of bar income in Nevada comes from slot machines and video poker while serving food is pretty much an afterthought, a good many kitchen staff and waitpersons (most of whom only earn minimum wage) will soon be shown the door.
Personally, I can understand arguments from both sides of the fence on the minimum wage issue. Supposably, raising minimum wage causes employers to invest in more robotics, resulting in more non-skilled labor lay-offs. Conversely, raising the minimum wage gives minimum wage earners more spending money, which in turn, helps the economy and improves the tax base. Since I am retired, the whole thing is a non-issue with me, except for one benefit. I now fall into the poverty bracket and qualify for assistance with my gas & electric bills. So, in esssence, I benefit from the passing of the law without aiding the economy or the tax base. Go Figure!