If only we could do that with, say, the new minimum wage laws.
Well, some economists got lucky this time, but in an upside down sort of way. Before the new federal minimum wage laws went into effect, there were already some states with minimums set at the higher level. So here was a great opportunity to compare the unemployment rates between the two groups of states. Both groups would be living in the same economy, with the same fears of an economic downturn, fears of Obamacare, interest rates, etc etc etc.
But one large group of states would suddenly go through a minimum wage hike, all at the same time. Another group would already be dealing with the higher minimum.
This is from The Wall Street Journal, via Newsalert:
Today marks the first anniversary of Congress's decision to raise the federal minimum wage by 41% to $7.25 an hour. But hold the confetti. According to a new study, more than 100,000 fewer teens are employed today due to the wage hikes.
Economic slowdowns are tough on many job-seekers, but they're especially hard on the young and inexperienced, whose job prospects have suffered tremendously from Washington's ill-advised attempts to put a floor under wages. In a new paper published by the Employment Policies Institute, labor economists William Even of Miami University in Ohio and David Macpherson of Trinity University in Texas find a significant drop in teen employment as a direct result of the minimum wage hikes.
The true minimum wage is zero. You can't raise it.The wage hikes were implemented in three stages between 2007 and 2009, and not all states were affected because some already mandated a minimum wage above the federal requirement. But for the 19 states affected by all three stages of the federal wage increase, "there was a 6.9% decline in employment for teens aged 16 to 19," write the authors. And for those who had not completed high school, "we estimated that the hikes reduced employment by 12.4%," which translates to about 98,000 fewer teens in the work force.
When politicians raise the "minimum wage", all they're doing is raising the "productivity threshold", making it illegal to hire people whose productivity doesn't reach the new minimum level.
The higher they set their new minimums, the more people they condemn to earning the true minimum, which is zero. Nothing. Zilch. Nada.