Fun with numbers
Monday, May 6, 2019 - Posted by Rich Miller
* Politifact took a look at a claim by Sen. Dale Righter (R-Mattoon) about the minimum wage…
Righter said, “The last time Illinois raised the minimum wage in 2006, the very next year this state lost 50,000 jobs” and that “the prediction this time is, we’ll lose 90,000 jobs.”
Federal employment data show Righter had his facts backwards: Job numbers for 2007 rose nearly 50,000 higher than they were in 2006.
A spokeswoman said Righter was actually referring to unemployment, which did increase that year. But experts noted that spike was likely due to broader economic forces at play as the nation headed into the Great Recession. What’s more, Illinois saw unemployment decline following wage hikes that took effect in 2004 and 2005.
Righter’s prediction that Illinois’ upcoming wage increase will result in more job loss holds up no better. We traced it back to an analysis of a different minimum wage bill produced by a group that has historically opposed minimum wage hikes.
We rate Righter’s claim False.
It all depends on how you look at the numbers, I suppose. Illinois ended 2006 with 5,821,022 jobs and ended 2007 with 5,869,157 jobs, which is an increase of 48,135 jobs.
The number of unemployed Illinoisans at the end of 2006 was 293,920 and the number at the end of 2007 was 364,530, an increase of 70,610.
The unemployment rate went from 5.3 percent at the end of 2005, to 4.4 at the end of 2006, back up to 5.4 in 2007 and then up to 7.8 in 2008 and peaked at 11.3 at the end of 2009.
PolitiFact is right that the country was slipping into recession at the time, so it’s impossible to say that one specific law caused anything. And this is particularly so because the minimum wage was only increased by 25 cents an hour in 2007.
- slow down - Monday, May 6, 19 @ 11:15 am:
Staunch conservatives have and will always make this claim because it’s at the core of their conservative beliefs about free markets and the role of government. Whether the data supports their beliefs has never, and likely will never influence their thinking.
- Bruce( no not him) - Monday, May 6, 19 @ 11:26 am:
So, did the minimum wage increase cause the recession? #snark
- lakeside - Monday, May 6, 19 @ 11:30 am:
Some people making $10 more a week brought our country to its knees. Who’d have thought.
- wordslinger - Monday, May 6, 19 @ 11:43 am:
If Righter truly believes in direct cause/effect on minimum wage and jobs, he should be all for an increase.
Between 1978 and 1992, the Illinois minimum wage more than doubled from $2.10 to $4.25.
During that same period, the number of people employed in Illinois grew from 5.4 million to 6 million.
Perhaps there are a few more factors involved in macroeconomics other than minor bumps for the lowest 3% or so who make minimum wage.
Those like Righter should just spit it out — they are against a minimum wage, period. That’s what they’re arguing, when you get down to it.
Perhaps they should do a little research as to the conditions that led to the minimum wage and other labor laws in the first place. The magical hand of the marketplace really wasn’t looking out for the folks.
https://fred.stlouisfed.org/series/STTMINWGIL
https://data.bls.gov/pdq/SurveyOutputServlet
- Downstate Illinois - Monday, May 6, 19 @ 11:50 am:
Stop pretending that a bunch of politicians can make decisions affecting the free market and then those laws don’t affect the marketplace. It’s basic economics. Higher minimum wages eliminated jobs for the people whom lawmakers are trying to help. Check out Seattle and New York.
- JS Mill - Monday, May 6, 19 @ 12:02 pm:
= It’s basic economics. =
More money in the economy equals more consumer spending.
- the q - Monday, May 6, 19 @ 12:03 pm:
the unemployment rate in Seattle is right at the national average and lower than the rest of Washington
- wordslinger - Monday, May 6, 19 @ 12:22 pm:
–Stop pretending that a bunch of politicians can make decisions affecting the free market and then those laws don’t affect the marketplace–
Many factors effect the marketplace, which is the point.
I posted links from the Fed and BLS to back the facts I posted. Why don’t you summon the energy to go beyond crying “stop doing that” and give it a try?
- Lester Holt’s Mustache - Monday, May 6, 19 @ 12:35 pm:
==A spokeswoman said Righter was actually referring to unemployment==
Disappointed they didn’t just respond with “Fake math!”. Sheesh, don’t you guys learn anything from your president? /s
- Downers Delight - Monday, May 6, 19 @ 12:48 pm:
JS Mill, an increase in the minimum wage does not put more money in the economy. It is possible that its velocity may increase because minimum wage workers tend to save less of their income (which can lead to economic growth), but it does not increase the money supply.
Alternatively, the business owner could keep the revenues not paid in a higher minimum wage and use it for a business improvement (more business spending) or keep the profits to use on personal spending (a similar increase in consumer spending). On average, only the top 10% of income earners annually save more than 10% of their income, so likely the funds are staying in the economy.
The problem with the minimum wage debate (a direct statutory wealth transfer, which I prefer over government taxation and redistribution) is that even with a credible macroeconomic argument for increasing minimum wage to stimulate the economy, its effects are felt on the micro economic level (e.g. small business owners or shareholders).
- DuPage - Monday, May 6, 19 @ 12:52 pm:
Lower electricity costs would help small business owners afford higher minimum wages. The Rock Island Clean Line power line is opposed by NIMBYs and Comed. Lawmakers could allow it to be built on a new route, along I-88 to the 6-county area. This would bring large amounts of lower cost power to the Chicago area. Comed would still get their fee for the local delivery fee, NIMBYs would be appeased, businesses could afford higher wages, and we would all get lower cost power. I think it would be a win-win-win.
- Dotnonymous - Monday, May 6, 19 @ 12:56 pm:
The Oracle of Mattoon is never false…He’s just got it backwards….again.
- Downers Delight - Monday, May 6, 19 @ 1:03 pm:
Word, what DuPage posted is a perfect example of an offsetting factor to a higher minimum wage. Each increase is a take from businesses without much if anything in return. You’d likely see a different debate if business owners had something to barter for, even if not a 1 to 1 trade.
P.S. You BLS link doesn’t work as it is registered to your selection when you retrieved the data. I followed it manually and it can be found here: https://www.bls.gov/eag/eag.il.htm and then clicking on the “Back Data” chart link next to Employment.
- Annonin' - Monday, May 6, 19 @ 2:01 pm:
We should call him the Morooon of Matton. Check out his enlighted pot comments on IL lawmakers from last week’s.
The Cheney-Bush depression was killing the economy in’07. Defaults, bank failings, market slippage gettin’ going. Actually GovJunk’s first in the nation bank collapse over subprime loans ws ‘06. The only way a min wage hike does not put $$ in the economy is if workers keep $$ in their pockets and that does not happen.
- Goodbye crime - Monday, May 6, 19 @ 2:07 pm:
Raising the minimum wage reduce crime. Which is good for business and everyone else. http://time.com/money/4316108/minimum-wage-reduce-crime/