Fast food strikes to massively expand: “They’re thinking much bigger”

[tclambert]

25. The last studies I saw on this subject found the opposite, jobs increased in number.

It surprised the researcher and everyone else. He compared real cases where one state increased the minimum wage while a neighboring state did not. Expectations from decades of political arguments and economic modeling by economists making various assumptions always predicted a loss of jobs. In reality, jobs increased.

I have long suspected that increasing the minimum wage has a stimulating effect on the economy, since minimum wage workers with more money will spend that money quickly and the money gets re-spent over and over, providing more than one dollar of stimulus for each dollar of increased pay. The increase in business activity would actually require hiring more workers.

But when I tried to find studies of this question I found to my great disgust that, to simplify their models, economists routinely assume increasing the minimum wage has exactly zero effect on the overall economy. That the gains should precisely balance the losses was the one outcome I dismissed as ludicrous. I was prepared to find I had it backwards, though I didn't expect that. To have them assume zero just exasperates me.

That's when I stumbled on the state to state comparison. They have apparently repeated this study with many pairs or groups of states and continue to find the surprising result that increasing the minimum wage INCREASES the workforce.