One of the problems with economic politics generally speaking but particularly in America is that it’s based on arguments that are supposedly theoretical and impossible to prove. Keynesians and supply-siders go back and forth about basic economic theory, and no hard data ever seems to be able to settle the argument.
That’s starting to become less and less true, of course: Paul Krugman usually has at least a blog post a week with yet another fairly airtight evidence-based argument showing how and why his and his fellow Keynesians’ demand-side predictions were proven out. Both academic studies and everyday experience are increasingly showing that voodoo economics just doesn’t work, even as Republicans double down on their fantasy budget scoring. Sam Brownback’s abject failure in Kansas is yet another data point, as is the exposure of red states that have over-relied on the fossil fuel economy while pretending their short-lived growth was the product of royalist economics.
Well, now more progressive states will have an opportunity to prove out the advantage of demand-side economics once again with upcoming increases to the minimum wage:
The minimum wage will rise in 20 states and the District of Columbia on Thursday, as laws and automatic adjustments are made with the start of the new year.
In nine states, the hike will be automatic, an adjustment made to keep the minimum wage in line with rising inflation. But in 11 states and D.C., the rise is the result of legislative action or voter-approved referenda, according to the left-leaning Economic Policy Institute. Two more states — Delaware and Minnesota — will get legislatively driven hikes later in the year, while New York will raise its minimum wage on Dec. 31. Twenty-nine states will have minimum wages above the federal minimum of $7.25.
The size of the hikes range from 12 cents in Florida to $1.25 in South Dakota. Among those states hiking the minimum wage, Washington state’s will be highest at $9.47. Oregon’s is next at $9.25., followed by Vermont and Connecticut at $9.15. Massachusetts and Rhode Island will have $9 minimum wages.
If, all other factors being equal, these states see greater overall economic growth, lower inequality and real wage increases as a result of these policies as expected, it will be just another way in which the supposedly theoretical arguments over proper economic policy will be replaced with solid evidence. I’m looking forward to the test, and expect good results.
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