shared this story
from Mish’s Global Economic Trend Analysis.
The chart shows lower job growth rates in states with higher minimum wages.
Bias Towards Believing Myths
I am sure you can find studies that allegedly prove or disprove anything, but things change over time and wages tend to go up over time so there is an inherent bias towards believing myths.
Europe and Excellent Backdrop for Discussion
Europe provides an even better look at the debate because of wide country-to-country variances.
Here is a rock-solid study of actual data by
For that, I present a rock-solid view of economist Steve Hanke, For Europe’s Youth, Minimum Wages Mean Minimal Employment.
Yesterday, in the wake of Tuesday’s State of the Union address, I poured cold water on President Obama’s claim that a hike in the minimum wage for federal contract workers would benefit the United States’ economy, pointing specifically to unemployment rates in the European Union. The data never lie: EU countries with minimum wage laws suffer higher rates of unemployment than those that do not mandate minimum wages. This point is even more pronounced when we look at rates of unemployment among the EU’s youth – defined as those younger than 25 years of age.
In the twenty-one EU countries where there are minimum wage laws, 27.7% of the youth demographic – more than one in four young adults – was unemployed in 2012. This is considerably higher than the youth unemployment rate in the seven EU countries without minimum wage laws – 19.5% in 2012 – a gap that has only widened since the Lehman Brothers collapse in 2008.
Hanke concluded with a piece of wisdom from Nobelist Milton Friedman: “the minimum wage law is most properly described as a law saying employers must discriminate against people who have low skills. That’s what the law says.”
I conclude with: Let’s
not judge an argument based on bias against the person stating it.
Mike “Mish” Shedlock