Minimum Wage: Beggaring Workers does not Help Employment (Infographics)

There is no place in the United States where a minimum wage worker working 40 hours a week can afford rent on a two-bedroom apartment.

h/t The Century Foundation.

Where the state’s minimum wage is lower than that of the Federal government, or where there is no minimum wage, workers get the Federal minimum wage. The vast majority of states which thereby guarantee the lowest wages allowed by Federal law are in the South– South Carolina, Georgia, Alabama, Mississippi, Louisiana and Arkansas. If a low minimum wage created more employment, then these states should be solid green in the second map, at the bottom, showing unemployment rates. But only Louisiana is, and it has petroleum. (High minimum wage doesn’t always track with high employment, but there lots of reasons for unemployment nowadays, especially the Great Real Estate swindle of 2008 and its aftermath. Economists have repeatedly found that increases in minimum wage often track with subsequent rises in employment).

Minimum wage laws by state.

Unemployment by state (Dec. 2012):

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9 Responses

  1. There have been countless independent (i.e., non-partisan) studies over the decades that prove conclusively raising the minimum wage does not have a negative impact on employment. Right wing (read: Republican) claims to the contrary are pure bullpuckey, to use Rachel Maddow’s term.

    When he was alive, Sen. Ted Kennedy often asked aloud,
    “What do Republicans have against working people?”

  2. Absentee landlords and lack of major employers are central to the wage/rent equation: simply pumping regulated dollars into the pockets of slumlords is hardly progress…Study hard, get a good job, make a decent living so that you can be fleeced for the masses is not an acceptable model of the oft-touted “fairness” supposed to be the current watchword. Perhaps minimum wage is a STARTING place for workers, not an assured living for the rest of their lives…

    • If you mean that “decent”, middle-class people are being raped by lazy welfare negroes, how about the $750,000,000,000 a year that goes to the military and its consequent debts – both from past deficits and obligations to veterans? Is our military installed in over 130 countries really serving the middle class, or creating pacified zones to ship their jobs to? And when have money from right-wing tax cuts ever gone to anyone but the rich?

  3. @Charley, @Juan: If the law of supply and demand does not apply to the job market, then is there some other theory that can establish an optimum minimum wage? Why $9 and not $8, $10 or $20?

    • It’s a pretty simple concept. It’s the belief that, at a very basic minimum, working 40 hours per week should earn an employee enough money to pay for the basic human needs like food clothing and shelter.

    • “IF” is a good word to start your sentence with. I would add “there is,” to read “IF THERE IS a law of supply and demand.” Since that poorly examined postulate that a few actually dare to question as a “law” of any sort is such a binary rough notion based on the “science of economics,” all those intuitively seductive and patently misleading graphs and curves and functions that so intentionally obscure the real face of “homo economicus.” Nice argument for the dead-end status quo, if that’s what was intended, apologies if it was not. “Doing nothing” or continuing to collect rents and wage-enslaving the most of us is just a dead-end game.

    • Well hell, the capitalists get to establish how much is too much by raising prices until they can’t find a scam for getting away with it anymore.

      Labor markets suck because there are many “sellers”, few “buyers”. Markets always favor the side with few bidders. When those same workers go home and become consumers, they usually find they in their millions are up against a handful of sellers. There is no relationship between what I get paid to make an object and how much it sells for, until I and my fellow consumers go broke, as they have with increasing frequency in recent decades.

  4. That Bakken Oil Boom is very visible on the map. When that busts, it’s going to hit the US economy hard.

    Jesper: unfortunately, economics is not well-developed enough to have a good theory of the minimum wage. The theory of monopsony helps a little.

    We know that at current levels we can keep raising the minimum wage and it will actually cause unemployment to DROP. We have never tried raising the minimum wage far enough that it causes unemployment to rise. Perhaps we should try it — that’s the only way to tell how high that number is!

  5. If the USA went back to a very progressive tax rates there would be less motive for denying workers a reasonable wage for reasonable work because those employing labor would not be able to keep excess profits earned from paying workers a non sustainable wage.
    I agree that not every job should be guaranteed a wage that one person can live on. In “socialist” Europe many entry level positions are paid very little because the person holding the job is also being educated. Furthermore why does the minimum wage have to be at a rate that a person can afford the rent of a one bedroom apartment after working 50 hours. Are Americans to good to have roommates? Is it to much to ask that three people making mimimum wage share a one bedroom apartment? Shit for most of the people in the world for most of human history 6 people were crammed in to a one room and if three people were gone the three that were left felt lonely.
    So if some jobs do deserve a minimum wage and other do not
    how does it get decided? Well over here it gets decided by
    negotiations between management and STRONG (mandatory) unions. But things will probably never happen like that in the US because some Jimbos do not want to admit that sometimes Europeans have better ideas than Americans.

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