Back on Valentine’s Day, I posted about the link (or lack of one) between a proposed hike in the federal minimum wage and unemployment levels. I know…not a very romantic post for Valentine’s Day. I got several questions, so I thought I’d expand on them and do a couple follow-ups with a bit more information. To recap, basic economics would suggest that as the minimum wage increases (the price of labor), the consumption of labor (employment rate) would decrease as employers consume less of it. The problem though is that a good deal of research shows that this relationship doesn’t exist.
In my initial post, I referenced Washington and Oregon as two states whose minimum wages were already above or near the proposed $9/hour federal minimum. So the question is…how have they been doing? Has that higher minimum wage meant higher unemployment? Read more