Justice Louis Brandeis once characterized the states as “laboratories of democracy”. At Slate Jordan Weissmann writes about Seattle’s experiement in raising the local minimum wage to $15 an hour:
Economists everywhere may soon be thanking Seattle Mayor Ed Murray. Not because of his inspired policymaking, but because Murray seems ready to turn his city into a gigantic laboratory for one of the most ambitious, and quite possibly misbegotten, labor market experiments in recent memory.
The entire article is interesting and I commend it to your attention.
As I see things the real minimum wage peaked around 1970 and, well, conditions were very different then than they are now. The labor market was different. The global economy was different. It was a lot easier to get a job that paid more than minimum wage then that it s now. I think the primary effect of the high minimum wage was to incentivize the mass immigration we’ve seen since then, something only paralleled in our history by the immigration at the end of the 19th century.
It may be that a $15 minimum wage in Seattle will work out just fine. The experiment will soon be under way. Illinois Gov. Pat Quinn wants to raise Illinois’s minimum wage to $10 an hour, something I suspect will be disastrous. Illinois already has the third-highest unemployment rate in the country and a higher minimum wage than Wisconsin, Iowa, Indiana, or Missouri. I don’t think that Illinois is healthy enough to make a good experimental subject.