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Minimum Wage's Minimal Effect on Unemployment
A couple of weeks ago, I pondered what would happen to the unemployment rate if Congress raises the federal minimum wage. My guess: very little. And now for you readers with a stomach for numbers, I've got more data lined up in support of my case.
State experiences show that, if anything, raising a state minimum wage actually correlates to better employment performance than the country as a whole. That actually surprised me a bit.
Here's how it breaks down...
From 1990 to 2004, 10 states raised their minimum wages above the federal wage floor. With a huge assist from super-research intern Deric Gruen, I looked at what happened to state unemployment rates when the states boosted their wages above the federal minimum. In 7 of the 10 states, the unemployment rate performed better than the national average. The other 3 performed worse.
State by state results are below the jump.
