In 2000, manufacturing was 15% of the California economy and California produced 95% more manufactured goods than did Texas. In 2016, manufacturing was 11% of the California economy and California produced 28% more manufactured goods than did Texas. Manufacturing in Texas held steady at 14% of the economy from 2000 to 2016. All this according to the U.S. Bureau of Economic Analysis.

More on the unintended consequences of hiking the minimum wage from a column by Scott W. Rasmussen entitled, “The Economics Profession Doesn’t Understand How the Economy Works.”

“Recognizing that most minimum wage workers currently get a raise within a year, some businesses might respond by keeping workers at the new minimum for a longer period of time. Others might trim their profits a bit while a different group might trim the pay of those who earn a bit more than the minimum. There could be other positive or negative feedback as well.”

You may not agree with them, but the numbers are real–it’s math.

I never said there were “massive numbers of lazy folks living off handouts” those are your words. What I said was that our true poverty rate, using a more comprehensive measure, 16.4% is barely above the national average, 16.0%.

You have to look at the next age cohort older. If you just advance the age to 26, you’ll see that a full majority of minimum wage earners are 26 and under. Again, the minimum wage is primarily a wage earned by the young, the inexperienced and people earning a second income. Raise the minimum wage and even fewer teens will get jobs, BTW.

Thanks for the NYT piece, vietvet3 (and thanks for your service, I’m a lieutenant colonel in the U.S. Army (retired) Reserve myself). But, the piece you cite mentions nothing about McDonald’s pricing their burgers the same in stores with different minimum wages, to the contrary, the story says the opposite:

“But opponents of raising the minimum wage can also point to evidence here of negative, or uneven, consequences. When wages go up, they say, prices do as well.”

WUSRPH, how do you figure? Remember that new U.S. Census report that I cited? It uses a new methodology to calculate poverty, one advocated for by those on the left for quite some time. Unlike the old measure, which simply takes 3 times the cost of food as the poverty line, the new measure looks at cost of living by state, the value of government benefits, and the impact of taxes. Using this new, more comprehensive measure, Texas’ poverty rate from 2010 to 2012 was 16.4% while the national average was 16.0%. Texas was within the margin of error of the national average. California, on the other hand, with some of the most generous welfare benefits in the nation (they have 1/8th of the population, but 1/3 of the nation’s TANF recipients, for example) had a poverty rate of 23.8%, the nation’s highest. This isn’t my calculation, it’s that of the Obama Administration. See: http://www.census.gov/prod/2013pubs/p60-247.pdf

You realize that these stores may have been owned by the same franchise, with one store’s profits supporting the other? Until you see their P&L statement, you can’t tell much. Further, according to the U.S. Department of Labor, Washington State’s minimum wage is $9.32 per hour, not the “over $11” you claimed.

What about working not at all, even if capable?

You know we’re mainly talking about small businesses here?

Wow, it’s so awesome that you know more than hundreds of millions of people making decisions on their own. Can I entrust my retirement plan to you?

See: “…since 1965. In constant dollars, federal spending on welfare and anti-poverty programs has risen from $178 billion to $668 billion, a 375 per cent increase in constant 2011 dollars, while total welfare spending—including state and local funds—has risen from $256 billion to $908 billion.” http://www.cato.org/sites/cato.org/files/pubs/pdf/PA694.pdf

Nickthap, that money comes from somewhere. If an employer pays more for labor, and the output is the same, the employer has less profit and less to invest in improving productivity.

President Kennedy on his tax cut proposals:

This administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963. I am not talking about a quickie or a temporary tax cut which would be more appropriate if a recession were imminent. Nor am I talking about giving the economy a mere shot in the arm to ease some temporary complaint. The federal government’s most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities of private expenditures.

There were several recessions in the 50s that Pres. Kennedy cited in his arguments to cut the top marginal rate. Growth accelerated after the cut.

Perhaps. Do you think raising the federal minimum wage would result in an across the board increase in these wages too, given that they are not completely in the legal economy?

No relation.

And no, I was referring to your comments. I used the phrase “honest” there in the context of a full accounting of data. For instance, doubling the marginal income tax from 25% to 50% isn’t just a 25% increase in a tax, rather, in a static analysis, one would be doubling government tax revenue and doubling the income taken from people.

Humphrey-Hawkins should be repealed. Nothing is really settled, is it? Was it settled that the top marginal income tax rate was 91% in 1962? Then 70% in 1966? No.

I haven’t seen that breakdown. The data I’ve seen lumps it all together.

It’s simply math, not “spin.” Lastly, I don’t see it as the Fed’s business, or government’s, to determine prices and manipulate the economy — that almost always ends badly.

This comment was directed at the prior comment, not your blog post. It’s simply math, not “spin” as WUSRPH said below.

WUSRPH, it’s all about ratios. If 16% of Texans are in poverty, we can say that 1 in every 6 Texans are in poverty, about the same as the national rate. This compares to 24% of Californians, or about 1 in 4. Put another way, for every 3 people in poverty in California, there are about 2 in Texas — hence, 45% more people per capita. This is a more honest and complete way of looking at a statistic than saying that there are 8% more people in poverty in California — it gives a sense of proportion to the numbers, just as if we were comparing 1% to 8% – the latter is 8 times bigger than the former.

The recent article you cite didn’t take into account the growth in welfare benefits since then. There’s a lot of in-kind assistance today that’s given out in greater numbers and values than before. Further, according the federal statistics, minimum wage earners are mainly the young, people who have second incomes, or non-heads of households. Raising the minimum wage will drive the youth, already the group with the worst employment numbers, into even greater unemployment.

Not from Galveston…

By increasing the cost basis of goods and services sold. Further, it would put greater inflationary pressure on Texas than on high cost states such as New York and California. Labor clears at a price determined by age old rules of supply and demand. Increase the cost for unskilled labor and people in the market for that labor will use less of it or seek ways of substitution (see the news story a few months ago about the $100,000 fast food machine that replaces most of the labor used in fast food restaurants). Hiking the minimum wage will decrease employment nationwide, but more so in states where the cost of living due to taxes, regulation, law suit environment, etc. are lower.

Isn’t there some irony in the fact that the U.S. Census, in their more comprehensive measure of poverty, says that California has the greater percentage of poor in the nation, 45% more than Texas? Hiking the minimum wage to $10.10 will likely increase the proportion of poor in Texas as more go without jobs at all.

Here’s the U.S. Census poverty report I referenced: http://www.census.gov/prod/2013pubs/p60-247.pdf

Erica uses the obsolete Census poverty rate calculation to make her case, the one that is not adjusted for cost of living and the value of government benefits. The U.S. Census Bureau’s Supplemental Measure of Poverty has Texas at 16.4%, barely above the national average of 16.0%–in fact, within the margin of error. California actually has the nation’s highest true poverty rate, as adjusted for cost of living and the value of government benefits at 23.8%, some 45% more per capita than in Texas.

Further, because Texas had the 10th-lowest cost of living in the nation in the 3Q2013, a minimum wage hike here would have a far greater effect than in states such as California. In 2013, the cost of living index for Texas was 91.6, for California, 124.3.

There are far fewer people getting paid the minimum wage in California because that state’s high cost of living forces employers to pay more for labor.

Raising the minimum wage to $10.10 would equal the equivalent of $11.03 per hour in real purchasing power in Texas vs. $8.13 per hour in California.

Such an increase would have a large negative effect on Texas competitiveness and result in far higher cost of living pressure here than in California.

Artificially setting wage floors is a bad idea. The minimum wage is mainly a wage paid to younger workers with less skills and, according to federal statistics, isn’t very common as the main wage of a head of household. Hiking the minimum wage will make it harder for the young and inexperienced to get their first job.

Well done.

Another issue with this report is that, in many of the metrics, no allowance is made for the fact that Texas has a far lower cost of living than in states such as California or New York. This fact, when combined with other factors, such as the value of government assistance, has led the U.S. Census Bureau to reevaluate the poverty rate in a November 2012 report. This federal report calls out California for having the nation’s highest rate of people in poverty, 23.5%, some 42% higher proportionately than in Texas.

Interesting that the piece ended with the Sacramento Bee’s off key criticisms of Texas. Regarding the high school graduation rate, they’re just flat wrong. The latest data from the U.S. Department of Education (http://eddataexpress.ed.gov/) shows Texas near the top of the pack among states with an 86% graduation rate (in the top quintile) compared to California’s rate of 76% (in the 2nd from the bottom quintile). Rather than bemoaning CO2 emissions let’s look at air pollution that actually harms people and plants. According to the U.S. EPA, out of the 25 worst metro areas for particulate pollution and the top 25 for ozone pollution, California boasted 19 and Texas 3 for 2012. I mentioned both to the Sacramento Bee — they’re didn’t run a correction.

For instance, the U.S., with a large number of young immigrants and a higher birthrate, has a median age of 36.8 years. Belgium, at the bottom of the chart, with a more homogeneous population, less immigration, and a lower birthrate has a median age of 42.3 years. This is a huge difference statistically, John, and it would likely account for a correspondingly huge difference in wage level differences, i.e., less young people = less low wage people.

Bottom line, be very careful when accepting conclusions from a left wing group that advocates for more unionism and more government handouts.

John, the group you cited is a liberal group. Wage levels are also determined by average age, and other factors, such as pay at the higher levels.

I was citing the added cost in California for a veteran’s plate — above the normal registration fee. In Texas, veteran’s plates cost the same as a regular plate.

Funny: I’m selling my house in Orange County and moving to Texas where I am co-authoring a book entitled “The Texas Model” for the Texas Public Policy Foundation.

Your analysis of California is dead on — one of the reasons why, as the sole non-millionaire in the race in 2010 (Boxer, Fiorina and Campbell were), we calculated that I might do better against Boxer.

Excellent. Thanks for the dialogue. I agree with your general thrust, but, here’s the counter-intuitive part of the dynamics from last year’s race for the U.S. Senate: polls showed that I often did better among women voters than did my other opponents and, being an Army lieutenant colonel from a middle class background, might have done better among Hispanics than the others. But, alas, one person had a lot of personal wealth and I didn’t. That said, I didn’t begrudge Governor Palin’s endorsement at all — they did work on the same team for McCain (many of my supporters weren’t so forgiving, however).

Section9,

Your comment, “Chuck DeVore couldn’t beat Hitler in an election for Mayor of Tel Aviv. Palin understood this, which is why she endorsed Fiorina,” is witty, but, it’s pure hyperbole.

You may have been able to make a good argument for your case, but this isn’t one.
I offer three facts to counter your wild claim:
1) I won six elections in California from 2004 to 2008 in a district of about 500,000 people – almost as many as live in Alaska. My last reelection, in 2008, I won by 14 percent in a district that Obama won – doing about 18 percent better than did McCain and his running mate. Further, the Democrat outspent me as I shipped my campaign funds to other districts to help Republican candidates.
2) I raised $2.5 million for the U.S. Senate in 2010 – more than the top four Republicans combined raised in the previous cycle against Barbara Boxer, a race that included Bill Jones, California’s former Republican Secretary of State. In June of 2010, I had raised more money than all but three statewide candidates: Whitman, Fiorina and Campbell (the latter beating me by only $100,000).
3) The L.A. Times/USC poll in November 2009 showed Fiorina at 27 percent and me at 27 percent. Several polls after that tested the head-to-head of Fiorina vs. Boxer and me vs. Boxer, most of which showed little difference and some showing me performing better against Boxer. (So much for, “Chuck DeVore couldn’t beat Hitler in an election for Mayor of Tel Aviv.”)

It’s true that Fiorina deployed $5.5 million of her personal wealth in the primary, and that certainly helped her to victory. So, if you wish to make the case that she had more resources to win, that’s supportable by the facts.

But, to claim that, after winning a total of 11 elections in California over the years, I “…couldn’t beat Hitler in an election for Mayor of Tel Aviv” is rather ridiculous, especially as I’ve been to Tel Aviv about a dozen times since 1984 and have friends there!

All the best,

Chuck DeVore
California State Assemblyman, 2004 to 2010
http://www.ChuckDeVore.com

Glad you picked up on this Nile, I think we've been the only two to do so. I tweeted about it earlier today:

@chuckdevore
TelePrompter #Fail – #Obama refers to "English Embassy" trashed in Iran. Has there EVER been an "English Embassy"? Ever?

And:
Re: #Obama's "English Embassy" gaff, doubt media will report – too busy gothcha-ing on Republican candidates #RS #tcot

And finally:
Re: #Obama's "English Embassy" gaff, don't tell the Scots that the English have an embassy in Iran, they'll want 1 too. #rs

Given that the first diplomatic missions were temporary and lacked a permanent home, an "embassy" or more formally, a "chancery," I wonder if England, ever had an "embassy"? "England" ceased to exist for diplomatic purposes in 1707 after the union with Scotland.