Minimum Wages and Unemployment

Well, that didn't take long.
The minimum wage was increased, and unemployment jumped.

Here's cnn.com:

NEW YORK (CNNMoney.com) -- The unemployment rate soared to a nearly five-year high in August as employers trimmed jobs for the eighth straight month, the government reported Friday.
The unemployment rate rose to 6.1%, the highest level since September 2003. That's up from 5.7% in July and 4.7% a year ago.

Here's Thewhitedsepulchre.com, from about a month ago:

The phrase "minimum wage law" contains an inherent contradiction. You can't raise the minimum wage. The minimum wage has always been zero, and it always will be zero. Wrap your head around the implications of that, and, as Jesus said, you're getting very close to the kingdom of God.

Here's some more CNN, quoting the current leaders of The Mommy Party (D) and The Daddy Party (R):

But the campaign of Democratic presidential candidate Barack Obama said the report points out the failure of Republican policies.
"John McCain showed last night that he is intent on continuing the economic policies that just this year have caused the American economy to lose 605,000 jobs," Obama said in a statement. "John McCain's answer is more of the same: $200 billion in tax cuts to big corporations and oil companies, and not one dime of tax relief to more than 100 million middle-class families."
The McCain campaign argued that Obama's economic policies would cause more job losses in the future.

Here's some more whitedsepulchre.com, predicting that the mainstream media just won't get it:

A few months from now, start looking for bewildered print and online editorials about increased unemployment among teenagers and low-skilled minorities. The funniest ones will have no sense of irony, and will end with calls for our government to do something about the problem.

I hope you broke out in giggles while reading the CNN piece. Here's a group that sorta gets it, Loanspeed.com:

Some argue that a higher minimum wage leads to more unemployment. But with wages failing to keep up with inflation, some think more increases are needed.
Congress passed legislation last year that would raise the minimum wage in stages from $5.15 an hour to $7.25 in July 2009. (Several states already have minimum wages higher than that.)
“If labor becomes more expensive, employers will hire fewer workers,” notes a study from the National Center for Policy Analysis, a research firm based in Dallas.
And this appears to be playing out with teenage workers. The unemployment rate for teens this August was 18.9%, up from 16.2% a year ago. Admittedly, teens make up a small percentage of the overall work force - a little more than 4%. But some think higher wages limit any job rebound, especially in a struggling economy.

They're confusing the issue a bit by throwing in the inflation factor. Inflation is an increase in the money supply. If the Fed chose to let us in on how much new money they're throwing into the system? We could predict inflation with near Godlike accuracy. Then we would make them stop throwing new money into the system.

Here's a link to some folks that get it. Mean Ol' Meany says that:

Just this morning, I heard the talking heads screeching about the "unexpected" increase in unemployment at the end of July.
That increase was only unexpected to morons.
Lemme 'splain.
History or past performance is a good indicator of future results or future performance.
What does that mean?
Well, if you undertook an action fifty times in the past, and every single time you did that the same result occurred afterwards, that would tell you that those two indicators were probably tied together.
"You know, every single time that I go bobbing for french fries, I burn my face. What gives?"
"Uh, Homer, you keep dunking your head in a fry vat full of 350 degree grease. Understand?"

I think these people, like me, have spent some time doing price quotes in a manufacturing environment.

Lord have mercy, what a mess. Look at it this way. If someone says that Coca Cola is going to cost $50.00 per bottle, you're going to purchase less Coca Cola. Lower the price to ten cents per bottle, and you'll probably purchase more.

But we can't improve the unemployment rate by eliminating the wage laws.

We're too compassionate.