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Saturday, July 09, 2011

Did Raising Minimum Wages Kill Job Creation?

How much did raising the minimum wage 41% between 1997 and 2009 contribute the inability of the country to create jobs after the past two recessions?

Could the prosperity of the 1990s be due to everyone being able to get a low paying job which gave them a small reward for reliably showing up to work but MORE IMPORTANTLY gave them incentive to improve themselves and move up to a higher paying job?

Chart of United States Minimum Wage History from 1938 through today.

For the Raw Data, see US Minimum Wage History Data
My FIRST job at age 16 was busing tables at $1.35 an hour back when the minimum wage was $1.60. They were able to pay me below minimum wage because I got a $2 food allowance that bought a hamburger and a shake. Since I did a good job, the cooks rewarded me by upgrading me from a regular burger to a bacon cheese burger with fries. I learned it was a big deal to do a good job to make my co-workers jobs easier AND get a bigger share of the tips. I quit after six months when soccer season started so I could play on my school team again.
My second job was washing cars for minimum wage  of $2.10. They were upset I quit after only a month or two but I told them I'd love to stay at the outside job IF they could give me the $3/hr salary. The car wash boss wished me luck in my new job as a salesman inside a national department store.

Come discuss this in our "Investing for the Long Term" facebook group here
 

Kirk Lindstrom's Investment Letter Performance

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