The left has been fairly quite lately on the idea of “fair wages,” but the unions sure haven’t. Whether it’s through state minimum wage laws, a federal minimum wage, or future collective bargaining talks with the UAW, the government feels it know what’s best for the labor markets. Back in 2004 when the minimum wage was $5.15 per hour, few, if any Americans were making that low an hourly wage.
When the government and various state governments raised the minimum wage over $7 per hour, people were still making more than that, however, I felt that when jobs became scarce, the government was going to wish it didn’t raise the floor on the minimum wage. Five years later, unemployment is high, but unemployed workers in some parts of the country are still demanding higher wages, even if it means prolonged unemployment.
In order to illustrate where this issue is, I’ve decided to create a stubborn index. It combines unemployment rates, minimum wages, average wages, and unemployment benefits by state. The higher your state scores, the more stubborn people in that state are to realizing wages and labor costs must come down to create jobs.
To illustrate, I’ve created maps that show each statistic by itself and the stubborn index together.
Can we conclude anything from this analysis? While the results are preliminary, states with higher wages seem to have more employment issues? I'd like to do further analysis on state employment and regulation. I bet if we look at the number of employment regulations on the books per state and unemployment, we would also find a mild correlation.