The National Review has a must-read article by Paul Kupien and Ryan Nabil entitled, "Minimum-Wage Activists Should Look to Puerto Rico for Clues to the Future":
...beginning in 2017, California will gradually increase the statewide minimum wage until it reaches $15 in 2022. Not to be outdone, New York State will join California — raising its current minimum wage of $9 to $15 by 2022.
In 2015, California and New York’s median wages — the wage where half the state workers earn more, and half earn less — were $19.15 and $20 respectively. If average wages continue to increase at an annual rate of 2 percent, by 2022, a $15 minimum wage will correspond to 69 percent of the median-wage rate in California, up from 52 percent today. In New York, the ratio will increase from 45 percent to 67 percent. By contrast, Texas and Arizona, states comparable in size to California and New York, currently have ratios below 50 percent. Even Connecticut, a progressive state with a minimum wage of $9.60, has a ratio considerably below 50 percent. In Mexico, California’s nearby NAFTA trade competitor, the ratio is 38 percent. When politicians raise a state’s minimum wage as high as the median wage, businesses in that state must raise the salaries of half of those employed, or else take measures to trim the number of employees on the payroll.
The only historical examples close to the California and New York minimum-wage experiments are the unfortunate experiences of Puerto Rico, American Samoa, and the Northern Mariana Islands following the passage of the Fair Minimum Wage Act in 2007. To cut to the chase, large federally mandatory minimum-wage hikes left these economies in shambles.Read the entire article. Suffice it to say, minimum wages require much more thought to be put into the actual figure used, rather than simply relying on "warm fuzzy politics".
(hat tip to About.com for the pic)
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