Another Milepost On The Road To Oblivion

Haven't heard this trope in a while, but you can count on Don Surber to bring it back:  Democrats raising the minimum wage destroyed the economy...and Don has proof this time!

First, my proof. In June 2007, minimum wage was $5.15 an hour and employment was at 146,140,000. Only July 1, 2007, the government raised the minimum wage to $5.85 an hour and employment fell by 30,000 in July. Employment would rise again, of course, peaking at 146,647,000 in November 2007, but the wheels were set in motion to reduce employment in a nation that had added 27 million jobs in the previous 14 years (nearly 2 million new jobs a year).

In June 2008, employment was at 145,891,000. On July 1, 2008, the government raised the minimum wage to $6.55 and employment fell by 72,000 in July.

In June 2009, employment was at 140,570,000. On July 1, 2009, the government raised the minimum wage to $7.25 and employment fell by 155,000 in July.

Now then, employment has stabilized. We have 139,296,000 people employed nationally — roughly where we were in July 2004 when 139,660,000 people had jobs. Raising the minimum wage wiped out 7 years of progress.

University of Chicago economist Casey Mulligan has been screaming about this for a while now, in fact Donny here seems to be pulling most of Mulligan's article from June on cutting the minimum wage.  Mulligan goes on to say that cutting the minimum wage back to $5.15 an hour would create 800,000 new jobs, and I laugh.  A minimum wage job at $5.15 an hour would be $10,700 a year, minus payroll taxes.  Instant poverty level.

It's amazing.  Supply-siders truly seem to think that the root of America's economic problems is that we pay fast food fry cooks too much money rather than we created bubble economy after bubble economy and they all burst at the same time.  The reason businesses aren't hiring right now isn't because labor is too expensive, they're not hiring because people don't have money to buy things.  We are a consumer economy and consumption is down, period.

Besides, in 2009 only about 5% of workers in the US were earning less than $7.25 an hour when the minimum wage was raised to that level.  It certainly didn't explain the layoffs at big companies and non-service industries.

If the problem is demand for product leading to layoffs, what will reducing the minimum wage do to increase demand?  It'll increase the bottom line for McDonald's and Starbucks, but that won't exactly help the people working there.