Theres been a lot of loose talk about how raising the minimum wage decreases the number of jobs available to the unemployed, i.e. increases unemployment. Heres a analysis of the stats from the 1950s and early 60s showing that not only is there no positive correlation between the two things but theres actually some evidence for a negative correlation, i.e. increasing the minimum wage might actually increase the number of jobs. I just dug this up as part of a discussion with a Tea Partier about the subject. I had presented the same facts to him a few months ago, but couldnt find the original comments. So Im presenting it here so that I can retrieve it more easily when necessary. I got all the stats from the Dept. of Labor: dol.gov/whd/minwage/chart.htm and the Bureau of Labor Statistics: data.bls.gov/timeseries/LNS14000000 At the beginning of 1950 the minimum wage was $.40/hr. and unemployment was 6.5%. In January of that year, the minimum wage went up 87.5% to $.75. Unemployment went down every month after that until in December it was 4.3%. In May of 1956, the unemployment rate was 4.3%. On May 1, the minimum wage went up to $1.00/hr. By October unemployment was around 3.9% and it remained fairly stable for the next year. In Sept. 1961 the unemployment rate was 6.7%. On Sept. 3 the minimum wage went up to $1.15. For the next year unemployment went steadily down. In July of 1962 it was 5.4%.
Posted on: Sat, 01 Feb 2014 16:48:41 +0000