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Originally Posted by Mavdog
the data is not deep. it is not complete. it is not thorough. it is not irontight. that is why I refer to it as a "snapshot".
yet it is indeed relevant. if there were a true and absolute connection between the increased minimum wage and the unemployment rate increasing there would be SOME exhibition shown.
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You are wrong here, Mav.
THere is a real endogeneity/direction of causality problem in your data.
First you look at a snapshot of some of the most healthy, prosperous, markets in the country- (where high costs and high general wages ensure that in most instances the relatively low minimum wage isn't binding anyway)
Then you try to campare that to low-productivity, low wealth, stagnant economic areas of the country (where people DO earn the minimum wage, and frankly are glad to get it)
You can't compare snapshots of the two and glean ANY useful information. Local voters in rich areas submit to higher minimum wages because the economic conditions can support it (few workers are affected, and the ones that ARE affected probably really need the help. Can you imagine trying to live in Manhattan or San Francisco on $3.35/hour, or whatever the current min-wage is).
On the other hand, what would happen if there was suddenly an enforced minimum hourly wage of $3.35 in Laos or in DR-Congo? Answer: there would be about 99% unemployment.
In a nutshell: Minimum wages are high in the rich states BECAUSE unemployment is low ---> which has already pushed up the market wage to the point that the higher minimum wages don't hurt the economy much.