States with Higher Minimum Wage Boast Faster Job Growth

originally posted by: NeutralGuard

originally posted by: FyreByrd
This is good news for everyone. Low wage earners put 100% of their earnings back into the economy, thus spuring growth that is much needed.

That statement sounds strange to me.

All wage earners put their money back into the economy. If you put your money in a bank, the bank lends it out. If you purchase stock, the business you invested in spends that money.

Banks just create money on paper, see Fractional Reserve, your deposits are liabilities on the bank balance sheet, not assets that they can lend to anyone.

The Savings and Loans and Credit Unions worked in such a fashion but S&L's are all but gone and the banks are now trying to get rid of Credit Unions as Well.

originally posted by: FyreByrd
a reply to: OccamsRazor04

And you Sir are completely off topic. Unemployment rates are not addressed at all in my post nor the article I referenced.

Only two variable are discussed: Job Growth and Minimum Wage and the correlation of the two.

I already addressed this.

State A had 10% unemployment 5 years ago. They have a low min. wage.
State B had 10% unemployment 5 years ago. They have a high min. wage.

Today State A is adding few jobs, because they were done bringing their unemployment back to normal levels of 5%
Today State B is adding more jobs, because their unemployment is an ongoing problem and still stuck at 7%.

Maybe now you see how it's on topic, because it directly impacts job creation. It just doesn't fit the narrative you want to sell, but I am not selling a narrative, I am giving the truth for free.

originally posted by: SlapMonkey
a reply to: FyreByrd

I would be interested in the job growth prior to that for all of the states...if they were already growing faster than other states--for whatever reason--this would indicate nothing.

Either way, half of one year, especially when measuring during summer (when there usually is an increase in job growth anyhow), does not a trend make in the world of job growth.

I already gave that information, he said it's not on topic somehow. The "poor performing" low min wage states had quick recovery / job growth, the "strong performing" high min wage states have lagged behind in job growth.

2010 Job growth. 2 of the top 5 states are low min wage states. ZERO are high min wage states.

For all of 2010, the states with the best net reading of job hiring minus job firing reports were:

North Dakota (+ 29)
D.C. (+25)
South Dakota (+21)
Alaska (+19)
Arkansas (+17)

www.cbsnews.com...

2011 Job growth. 3 of the top 5 states are low min wage states. ZERO are high min wage states.
www.jsonline.com...
media.jsonline.com...

2012 Job growth. 1 of the top 5 states are low min wage states. 2 are high min wage states.
www.cnbc.com...

2013 Job growth. 2 of the top 5 states are low min wage states. 2 are high min wage states.
www.kiplinger.com...

Here is a list from Recession to Present day. Three of them are low min. wage states, one is high min wage states. (lowest min wage of the top 10)

North Dakota367,000465,000+26.6 percent $7.25
Texas10.28 million11.55 million+12.3 percent $7.25
Utah1.19 million1.33 million+12.3 percent $7.25
Colorado2.24 million2.45 million+9.2 percent $8.00
Florida7.22 million7.80 million+8.0 percent $7.93
www.washingtonpost.com...


Right to Work states also did great.
www.nilrr.org...

a reply to: OccamsRazor04

Must be why all of them still need Federal aid money. Not even the reddest state can stand on its own. Pretty easy to pay those low wages with the help of all taxpayers:

www.cato.org...

a reply to: MOMof3

ok...I cant stay out of this any longer. grrr I said I was done and I should not have come back.

Momof3, are you trying to suggest that Red states depend on federal money more than blue ones?

You do know what those dollars are for, right? It's not aid as might be implied. It's matching highway funds, it matching education funds and it's a way to assure that states follow the federal guidelines. No follow guidelines, no get fed money.

To imply that these funds are some kind of aid because the state cannot "get by on it's own" is ignorant and does not even acknowledge where the funds initially come from.

If you want a discussion on red vs blue and economics, why don't we start with how poorly run heavily entrenched democratic cities are. Do you really want to even begin to open that Pandora's box?

a reply to: bbracken677

Oh hi BB. I am saying they all depend on the Federal Government for funds and aid. No state stands alone. One of my home states that I lived in for 30 years was Idaho. The average hourly wage is $11/hr. For every $1 paid in Fed taxes, Idaho receives $1.61 in Federal money.

www.ritholtz.com... heBigPicture+(The+Big+Picture)

originally posted by: NonsensicalUserName
a reply to: xuenchen

The number of jobs haven't gone down have they?

So that blows the theory that "minimum wage increases lead to job loss" out of the water, or at the very least pokes another hole in it.

furthermore; It's surprising that you would care what kind of jobs they were, I don't recall anyone predicting that, are they ideal jobs? probably not, it's going to take a lot more political clout to do anything about that though when we have bipartisan support for free trade agreements, and a GOP dead-set against any large public infrastructure programs.

Only liberals can get the basic economic principle of supply and demand bassackwards. Go ahead and raise wages in depressed areas and see what happens. The cost of labor gets passed on to the customer. So that Big Mac will cost more, because the minimum wage applies to people working in those sorts of businesses. Same goes for the local market. Checkout person gets an increase and so the cost of some items in the store go higher to compensate for that.

Business owners do not take the hit for the wage increase, but they know they may take a hit when they have to raise the prices of the goods or services they provide and sell. That's why they argue against mandatory wage increases.

When an economy is on the rise and more jobs are needed to satisfy the demand, this reduces the unemployed labor pool. To attract employees or to keep the employees, business owners sweeten the deal with more competitive wages. It really doesn't work so well the other way around.

a reply to: MOMof3

Well, if you stop and think that federal money comes from federal taxes, and the money comes from each state, it's just a "whose money is it" game. We lose a chunk of it to federal bureaucracy simply by allowing the feds to tax us and then send the money back to us... silly right? Why not just lower fed taxes and let the individual states increase theirs and cut out the middle man.

But dang, that makes too much sense, and no doubt some paper shuffler somewhere would lose his job because we created a somewhat more efficient transfer of funds. Not to mention that it would remove the leverage of "matching federal funds" the fed currently has on the states.

This is exactly the kind of inefficient BS that we accept from our govt as status quo. It has been this way for years. Ever hear anyone campaigning and saying this should be fixed? umm NO... govt bureaucracy will never fix itself. That's like wanting lobbying to be outlawed...will never happen cause those who benefit from the activities are the same ones making the laws.

originally posted by: bbracken677
a reply to: MOMof3

Well, if you stop and think that federal money comes from federal taxes, and the money comes from each state, it's just a "whose money is it" game. We lose a chunk of it to federal bureaucracy simply by allowing the feds to tax us and then send the money back to us... silly right? Why not just lower fed taxes and let the individual states increase theirs and cut out the middle man.

I almost agree with you. Heck I'd much rather pay taxes to my State then tend to spend it on useful things, helpful things rather then death and distruction.

But I've heard (read) you condem government and I wonder if you are confusing government with politicians. Life long public servants are not the enemy. The Bureaucracy help keep 'things' stable whereas politicians cause all the meyhem. And the problem is with the politicians and capitalists. Government bureacucracies are cost effective means of protecting public welfare. They are not always efficient - but we get more bang for our buck (compare medicare with private insurance as an example. Politians, convincing us 'government is bad' and selling off our public assests for pennies on the dollar is hardly efficent nor good for the public.

That's way off topic. Forgive me.

a reply to: FyreByrd

I believe the statement was that I verge on being an anarchist, or something along those lines. Truthfully, I recognize the need for government, however I despise how it is being abused and perverted. I fully endorse the Constitution and fully endorse a return to a Constitutional govt.

My frustration, and hence the anarchist remark, is driven by that abuse.

You say that govt bureaucracies are cost effective? What? lol you cannot be serious. There is nothing, absolutely nothing the govt does that is cost effective. There is nothing the govt does that is nearly as cost effective as the private sector where one has to keep costs under control, where one faces competition and where one faces bankruptcy or closure when not run efficiently.

This is the exact opposite of govt. They do not, nor are there pressures, to maintain control over costs. There is no competition to keep costs in line. They take money from us, it is not our choice to give it to them as a reward for excellent service.

Medicare is an economic disaster, routinely rife with fraud and graft. You do realize that in order for Medicare to be viable you have to purchase a supplemental insurance plan, right? Social Security would be illegal if it existed in the private sector, being nothing more than a Ponzi scheme. The war on poverty created more poverty... What about the war on drugs? How has that worked out? Shall we discuss the absolute failure that the federal govt influence on education has been? Shall we discuss the hundreds of govt agencies whose responsibilities overlap with an utter lack of communication and coordination? I can go on for days....

Main problem, IMO, is that govt is exceeding their Constitutional authority. They are trying to be all things to all people. We have politicians who insist on making some gesture to "show" they are helping people when they are not.

Even the HOV lane situation here in Dallas is a excellent example of how a fine idea for all the right reasons turns into a total clusterfrack after the govt implements it. Supposed to save gas, right? The way it's done here it saves nothing and an argument can be made how more energy is expended with the existence of the HOV lanes than without them.

Large govt = insanity. Unfortunately, the awful truth is that no govt, with our population density, would equal absolute disaster.

You are right, this is generally off topic and I will not return to this subject. But in a small sense it is on topic: States that are more efficient and less intrusive will likely fair better economically speaking. Another factor that affects economy that is outside the wage question. I do apologize for the .. swing toward offtopic.

a reply to: Bilk22

but at the same time it means people are spending more money, meaning low-wage workers now have more money to spend, outside of food, like on clothing or consumer goods.

There might be price increases across the board, but they shouldn't be too high, the reason for that is simple; a store will make less money when they charge beyond a certain point, as consumers will buy less, hurting their bottom line more than small price-increases.

Overall I think it's time that we stop worrying so much about big-business.

a reply to: NonsensicalUserName

Name one historical instance where wages went up and prices went up and buying power did not drop. It's the nature of the beast. It has been referred to as an invisible tax. The only entity that makes out well is the govt. That's because our money is their money and they can take as much of it as they please.

a reply to: bbracken677

We agree on this point: "This is exactly the kind of inefficient BS that we accept from our govt as status quo. It has been this way for years. Ever hear anyone campaigning and saying this should be fixed? umm NO... govt bureaucracy will never fix itself. That's like wanting lobbying to be outlawed...will never happen cause those who benefit from the activities are the same ones making the laws."

Lobbyists (a.k.a. The Elites or The Oligarchy) are the root problem of our nation's problems. They call the shots of what happens in congress, not the people who elected them.

originally posted by: bbracken677
a reply to: NonsensicalUserName

Name one historical instance where wages went up and prices went up and buying power did not drop. It's the nature of the beast. It has been referred to as an invisible tax. The only entity that makes out well is the govt. That's because our money is their money and they can take as much of it as they please.

In addition, taxes go up as wages go up. See how that works?

a reply to: bbracken677

you make an interesting point.
www.alternet.org...

3. Helps People Get Out of Debt: During the early part of the post-war period, particularly the 1950s and 1960s, entrepreneurship was more concerned with building productive capacity and putting workers to work actually making useful things as opposed to creating financial Frankenstein products like credit default swaps.

As our economy has become increasingly directed toward Wall Street and the so-called FIRE (finance, insurance, real estate) sectors, more wealth has migrated to the top 1 percent. On top of that, real wages have increasingly lagged behind the growth in productivity. It is also clear that hours worked and persons employed in the “productive” sector have been in decline over the last few decades.

a reply to: NonsensicalUserName

The problem is the five reasons are assuming that income goes up in a vacuum without corresponding increases in the cost of goods and services.

Doesn't happen. Show me, historically, where it ever has and I will shut my mouth.



Minimum hourly wage of workers

$2.65 for all covered, nonexempt workers
Jan 1, 1979

$2.90 for all covered, nonexempt workers
Jan 1, 1980

$3.10 for all covered, nonexempt workers
Jan 1, 1981

$3.35 for all covered, nonexempt workers
Apr 1, 1990

$3.80 for all covered, nonexempt workers
Apr 1, 1991

$4.25 for all covered, nonexempt workers
Oct 1, 1996

$4.75 for all covered, nonexempt workers
Sep 1, 1997

$5.15 for all covered, nonexempt workers
Jul 24, 2007

$5.85 for all covered, nonexempt workers
Jul 24, 2008

$6.55 for all covered, nonexempt workers
Jul 24, 2009

$7.25 for all covered, nonexempt workers

Pre 1979 min wage was broken up farm and non farm so I stopped at 79.

CPI in 1979 was 68,300. CPI (Consumer Price Index) in 2009 (which was the last historical increase) was 211,143.

That is an increase of 209% in the consumer price index.

During the same time the minimum wage increased only 147%.

One may argue that the minimum wage should have increased more during that time frame. It's an excellent point. If one assumes that wage increases happen in a vacuum and have zero affect on the CPI, then yeah. Otherwise the same trend would have occurred, just at a higher rate.

See where I am coming from? I am not against a nominal increase in minimum wage. I am, however, against a significant increase for the above reason.

To me, increasing min wage significantly would only be a "feel good" move with "feel bad" results. It is a shell game.... Run by the govt.

a reply to: bbracken677

Are wages the only element that causes the cost of goods and services to go up?

a reply to: MOMof3

Of course not. Sorry if I implied that.

The connection between wages and operating costs, and therefore prices is demonstrable and irrefutable.

Other factors that affect the price of goods and services would be such things as: energy costs, raw material costs (which also have a relationship with wages), taxes, utilities etc etc. Virtually all of these are affected, in turn, by the same... With regards to energy costs, the price of natural gas plays a big part, but wages play a part as well. Raw materials, whether they be parts manufactured overseas or natural resources are subject to supply and demand effects.

Bottom line is that there is nothing that a business works with that is not subject to market rates of some kind or other, including labor. You could say that the minimum wage is the market rate for unskilled jobs. Oversimplified, I know.

Virtually everything that is deducted from gross sales to determine net profit is a cost. Any change in cost will result in a change in net profit.

a reply to: bbracken677

From the laborers point of view, we don't see wages affecting prices at all. Most laborer wages have been stagnant for five years, but food, rent, gas, medical have not been stagnant. Also, when I owned a day care business for a few years, I deducted just about all my costs from my taxes the first year. I hired a helper the next year and increased my capacity level. Maybe it is different for big business and corporations.