Minimum Wages

In regards to the New York Times’ tendentious article today titled “For $7.93 an Hour, It’s Worth a Trip Across a State Line”, the paper reports as if there are no negative consequences of a government dictating the price of labor. The article compares the State of Washington with its high minimum wage to Idaho with its low minimum wage. The paper’s article is so one-sided and that it doesn’t even belong in the news section but rather the paper’s Op-Ed pages. Politicians and partisans want to raise the minimum wage? Fine, but be truthful about the cost to society for doing so.

The fact of the matter is this: when a government mandates prices, there are always costs that must be borne. In the case of minimum wages, the cost is higher unemployment rates, lower economic growth and higher inflation. All one has to do is look at Europe with its strict labor laws to see what happens when a government puts significant constraints on businesses to, well to hire and pay workers market wages. Europe has double the unemployment rate that the US does with half the economic growth rate.

According to the U.S. Bureau of Economic Analysis,, Washington has unemployment rate (4.9%) that is 50% higher than Idaho (3.3%). Only five of Washington's 39 counties had unemployment rates at or below the national rate. In fact, two counties had unemployment rates more than twice as high as the national unemployment rate (4.6%). Idaho has much lower inflation while at the same time leading the nation in job growth. Higher unemployment and higher inflation is the cost borne by the State of Washington.

Finally according to the NY Times story: “Idaho has a far higher percentage of minimum-wage jobs than Washington (my emphasis)”. The NY Times is perplexed as to why more of those earning minimum wage would prefer to live in Idaho with its lower minimum wage than in Washington State with its higher minimum wage. Simple answer: people find Idaho a more attractive place to live than Washington.