–Yahoo Finance Andy Serwer with Max ZahnYahoo Finance October 19, 2019 —
I’ve been seeing all kinds of blather lately that increasing pay — particularly a higher minimum wage — is killing job growth. Meaning that because employers have to pay more in salaries, they aren’t hiring, or are even firing workers.
My response to that?
In fact, what we’ve seen lately in the job market should finally put that old canard — higher pay leads to job losses — to rest.
Fact One: The effective minimum wage (I’ll spell this out below) has been soaring recently and is at an all-time high.
Fact Two: At 3.5%, the U.S. unemployment rate hasn’t been this low since December 1969, almost exactly half a century ago. Nixon was in the White House, Neil Armstrong was on the moon, and the hippies were at Woodstock. A long time ago.
That’s pretty much it, case closed, except for another fact. That is, I think employers, business owners, and CEOs sometimes use higher wages, particularly those mandated by the government (i.e. minimum wage hikes), as an excuse or cover for weak performance by their businesses — and/or for other reasons.