Minimum wage in Washington state did not kill job creation

[MillCreek]

http://www.bloomberg.com/news/2014-03-05/washington-shows-highest-minimum-wage-state-beats-u-s-with-jobs.html

Isn't this interesting.

[roo_ster]

If the market price for lower-skilled labor is higher than the minimum wage, we likely won't see much of an effect.

Of course, a minimum wage still prices out those with the lowest skill set or poor work habits. 

[tokugawa]

 1998-may be a bad year to calculate from-  I remember my friend who was training the homeless to clean up so they could get jobs in Western WA. , because there seemed to be NO bodies available- the labor pool was dry.  Every biz was desperate for workers.  Then the tech crash and 9/11 sorta put the kibosh on that-  So pumping the minimum wage in a boom may have a totally different result than in a depression.  
 
  I would be extremely reluctant to hire anyone in this class war climate- machines do not complain, show up late, do drugs and are as smart as half the population.....

 Seriously, with CNC robotic machinery improving and expanding into ever new markets, the question of a "minimum" wage may end up being irrelevant- there may simply BE no low paid unskilled jobs left- at all. (unless they are public money protected union jobs) . IMO, this is going to be one of the defining questions of the future- what to do with a mass of people who are unnecessary to productive efforts.
 Our current "solution" is to pay them , but we already have the lowest proportion of workers to population in our history. Imagine factories, mines,farms, service industries filled with robotic workers, maintained by a handful of skilled techs, owned by a very few ultra wealthy groups- they can be taxed to a point, but as they will be the ones who control the money spigot,(essentially owning the government)  there will be increasing reluctance to supply the goods to pacify the jobless, and a pressure to just get rid of the jobless- by one means or another.......
 Just another one of my distopian  futurist visions........

[BryanP]

Imagine factories, mines,farms, service industries filled with robotic workers, maintained by a handful of skilled techs, owned by a very few ultra wealthy groups- they can be taxed to a point, but as they will be the ones who control the money spigot,(essentially owning the government)  there will be increasing reluctance to supply the goods to pacify the jobless, and a pressure to just get rid of the jobless- by one means or another.......
 Just another one of my distopian  futurist visions........

They still have to have people to BUY their automated production.

[MillCreek]

They still have to have people to BUY their automated production.

As was so noted by Mr. Henry Ford, who paid his workers above prevailing wages so that they could buy his cars.  You need that middle class buying things if you want to have a working economy.

[makattak]

Wow. What a non-sequitor.

They are looking at growth in employment. How about overall employment?

Unemployment Rates for States
Monthly Rankings
Seasonally Adjusted
Dec. 2013
Rank   State   Rate

• 1   NORTH DAKOTA    2.7
• 2   NEBRASKA    3.6
• 2   SOUTH DAKOTA    3.6
• 4   UTAH    4.0
• 5   IOWA    4.2
• 5   VERMONT    4.2
• 7   WYOMING    4.4
• 8   HAWAII    4.7
• 8   MINNESOTA    4.7
• 10   KANSAS    4.9
• 11   NEW HAMPSHIRE    5.2
• 11   VIRGINIA    5.2
• 13   LOUISIANA    5.4
• 13   MONTANA    5.4
• 13   OKLAHOMA    5.4
• 16   IDAHO    5.6
• 17   MISSOURI    6.0
• 17   TEXAS    6.0
• 17   WEST VIRGINIA    6.0
• 20   ALABAMA    6.1
• 20   MARYLAND    6.1
• 22   COLORADO    6.2
• 22   DELAWARE    6.2
• 24   FLORIDA    6.3
• 24   WISCONSIN    6.3
• 26   ALASKA    6.4
• 26   MAINE    6.4
• 28   NEW MEXICO    6.6
• 28   SOUTH CAROLINA    6.6
• 30   WASHINGTON    6.7
• 31   INDIANA    6.8
• 31   PENNSYLVANIA    6.8
• 33   NORTH CAROLINA    6.9
• 34   NEW YORK    7.0
• 35   MASSACHUSETTS    7.1
• 35   OHIO    7.1
• 35   OREGON    7.1
• 38   NEW JERSEY    7.2
• 39   ARKANSAS    7.4
• 39   CONNECTICUT    7.4
• 39   GEORGIA    7.4
• 42   ARIZONA    7.6
• 42   DISTRICT OF COLUMBIA    7.6
• 44   TENNESSEE    7.7
• 45   MISSISSIPPI    7.8
• 46   KENTUCKY    7.9
• 47   CALIFORNIA    8.3
• 47   MICHIGAN    8.3
• 49   ILLINOIS    8.9
• 50   NEVADA    9.0
• 51   RHODE ISLAND    9.3
Now, minimum wages:


• Alabama   none
• Louisiana   none
• Mississippi   none
• South Carolina   none
• Tennessee   none
• New Hampshire   none
• Georgia   $5.15
• Wyoming   $5.15
• Minnesota   $6.15
• Arkansas   $6.25
• Delaware   $7.25
• Hawaii   $7.25
• Idaho   $7.25
• Indiana   $7.25
• Iowa   $7.25
• Kansas   $7.25
• Kentucky   $7.25
• Maryland   $7.25
• Nebraska   $7.25
• North Carolina   $7.25
• North Dakota   $7.25
• Pennsylvania   $7.25
• South Dakota   $7.25
• Texas   $7.25
• Utah   $7.25
• Virginia   $7.25
• West Virginia   $7.25
• Wisconsin   $7.25
• Oklahoma   $7.25
• Michigan   $7.40
• Maine   $7.50
• New Mexico   $7.50
• Missouri   $7.50
• Alaska   $7.75
• Arizona   $7.90
• Montana   $7.90
• Florida   $7.93
• Ohio   $7.95
• California   $8.00
• Colorado   $8.00
• Massachusetts   $8.00
• New York   $8.00
• Rhode Island   $8.00
• D.C.   $8.25
• Illinois   $8.25
• New Jersey   $8.25
• Nevada   $8.25
• Connecticut   $8.70
• Vermont   $8.73
• Oregon   $9.10
• Washington   $9.32
Now, the ones with no minimum or lower than the Federal level are, effectively $7.25.

So, looking at the data... there is a fairly clear correlation between a higher minimum wage and a higher unemployment rate. Washington (and Vermont, for that matter) is what we refer to as an "outlier."

I will also note that among the 30 states with the same minimum wage, there is a pretty wide disparity. This also illustrates that minimum wage is not the sole determinant of employment rates. It still clearly affects the rates, but when you cherry pick a single data point out of 51, (like this article did) you can tell whatever story you want.

[Tallpine]

pumping the minimum wage in a boom may have a totally different result than in a depression. 

Washington economy tends to go boeing, boeing a lot 

[MillCreek]

Washington (and Vermont, for that matter) is what we refer to as an "outlier."

This also illustrates that minimum wage is not the sole determinant of employment rates. It still clearly affects the rates, but when you cherry pick a single data point out of 51, (like this article did) you can tell whatever story you want.[/list]

Just like when you decide to change the parameters of the data reported upon, and dismiss data points that don't support your premise as 'outliers', you can pretty much tell whatever story you want.

[brimic]

Seriously, with CNC robotic machinery improving and expanding into ever new markets, the question of a "minimum" wage may end up being irrelevant- there may simply BE no low paid unskilled jobs left- at all. (unless they are public money protected union jobs) . IMO, this is going to be one of the defining questions of the future- what to do with a mass of people who are unnecessary to productive efforts.
 Our current "solution" is to pay them , but we already have the lowest proportion of workers to population in our history. Imagine factories, mines,farms, service industries filled with robotic workers, maintained by a handful of skilled techs, owned by a very few ultra wealthy groups- they can be taxed to a point, but as they will be the ones who control the money spigot,(essentially owning the government)  there will be increasing reluctance to supply the goods to pacify the jobless, and a pressure to just get rid of the jobless- by one means or another.......
 Just another one of my distopian  futurist visions........

Yep. More and more people will simply just not be needed.... its happening already.

[Tallpine]

Yep. More and more people will simply just not be needed.... its happening already.

So, can we send the Mexicans home?   

[MechAg94]

As was so noted by Mr. Henry Ford, who paid his workers above prevailing wages so that they could buy his cars.  You need that middle class buying things if you want to have a working economy.

From what the History Channel taught me, it wasn't just that.  His factories had extremely high turnover rates due to the work being repetitive and other stuff that sucked.  He had to increase wages to keep from having to train new workers all the time.

[MechAg94]

Doesn't Washington have other advantages like either no sales tax or no income tax?

They didn't bring up the cost of goods like the average fast food meal and such.  Also, the amount wasn't that much higher than the norm.  I didn't see if they looked at the number of part time min wage jobs available.

[roo_ster]

Doesn't Washington have other advantages like either no sales tax or no income tax?

They didn't bring up the cost of goods like the average fast food meal and such.  Also, the amount wasn't that much higher than the norm.  I didn't see if they looked at the number of part time min wage jobs available.

It is, uh, "close to the Canadian border" as Patrick Moynihan would note.

[MillCreek]

Doesn't Washington have other advantages like either no sales tax or no income tax?

They didn't bring up the cost of goods like the average fast food meal and such.  Also, the amount wasn't that much higher than the norm.  I didn't see if they looked at the number of part time min wage jobs available.

We have no state income tax.  We have a pretty impressive state/county/city sales tax.  Where I am, the total sales tax rate is 9.5%.

[tokugawa]

They still have to have people to BUY their automated production.

 But where will those people get the money?  i only see two ways- they get paid to do useless work, by the elites, or they get welfare from the state, by taxing the elites. Either way, the elites are paying for people they don't need. And the elites really don't need the money either- they need the product, and the power.

 I think we are gonna see a society of oligarchs, squabbling with other oligarchs, supported by a bunch of technocrats and a praetorian guard, and a planetary human die-off to clean up the playground of the elites.  They will not leave us to our turnip patches to labor in peace. 

 
 

[Ben]

We have no state income tax.  We have a pretty impressive state/county/city sales tax.  Where I am, the total sales tax rate is 9.5%.

With the caveat that I'm in CA, I'd pay 9.5% sales tax instead of state income tax in a heartbeat, especially in my bracket of the damn progressive income tax scale here. I think state + local sales tax are running 8% where I am right now.

[makattak]

Just like when you decide to change the parameters of the data reported upon, and dismiss data points that don't support your premise as 'outliers', you can pretty much tell whatever story you want.

Ok. Can you tell me why "Employment Growth" is the correct parameter?

China just had PHENOMENAL economic growth, especially if compared to the United States. Does that prove that communism is the way to grow your economy?

And when the  highest value drops off the trend of the other 20... that's called an outlier. I'm accounting for 48 states. The article is basing the entirety of their argument off of 1 state.

[brimic]

But where will those people get the money?  i only see two ways- they get paid to do useless work, by the elites, or they get welfare from the state, by taxing the elites. Either way, the elites are paying for people they don't need. And the elites really don't need the money either- they need the product, and the power.

 I think we are gonna see a society of oligarchs, squabbling with other oligarchs, supported by a bunch of technocrats and a praetorian guard, and a planetary human die-off to clean up the playground of the elites.  They will not leave us to our turnip patches to labor in peace. 

 
 

Plan on the money spigot being shut off once the last member of the middle class is pushed down to the bottom. 

[makattak]

But where will those people get the money?  i only see two ways- they get paid to do useless work, by the elites, or they get welfare from the state, by taxing the elites. Either way, the elites are paying for people they don't need. And the elites really don't need the money either- they need the product, and the power.

 I think we are gonna see a society of oligarchs, squabbling with other oligarchs, supported by a bunch of technocrats and a praetorian guard, and a planetary human die-off to clean up the playground of the elites.  They will not leave us to our turnip patches to labor in peace. 

Yes, BEWARE OF AUTOMATION!!!! It's going to put us all out of work at the farm! sawmills! textile mills! steel mills! automobile plants! <insert modern fear here>....

[Scout26]

Where I am, the total sales tax rate is 9.5%.

You're in Illinois?  (But we also have a 5% income tax, and some of the highest property taxes in the nation, yet this state is broke.  Go figure.)

[Fitz]

Slightly related, but one way to stay ahead of automation is to adapt to be the guy that fixes/maintains the automation.

Modern IT tools have greatly shrank sysadmin roles. Virtualization, things like System Center, etc. That's why I got into that stuff.

[Ben]

Modern IT tools have greatly shrank sysadmin roles. Virtualization, things like System Center, etc. That's why I got into that stuff.

Sure you did. Just admit you got into it for the chicks.  

[Fitz]

Sure you did. Just admit you got into it for the chicks.  

Give dat bish a scom. Bishes love scom

[Scout26]

But how many jobs were not created?

[Perd Hapley]

You're in Illinois?  (But we also have a 5% income tax, and some of the highest property taxes in the nation, yet this state is broke.  Go figure.)

5%, eh? Here, across river, we charge the Illini 6.25%.