Of the 72 central Massachusetts cities and towns surveyed by reporter Zeke Wright in Go Local Worcester Southbridge is tied for third place with Gardner.
Unfortunately, it is not a distinction that any community would relish.
You see, at 9.9% we’re tied for the third highest unemployment rate of those 72 communities. We are only beaten out by Fitchburg and Athol at 10% and 10.5 % respectively.
What is more disturbing to me, however, is how this survey is used as a premise for launching into the repetition of hackneyed attacks on plans to raise the minimum wage.
Christopher Pinto of the Worcester Republican City Committee said unemployment rates would be hampered by efforts to raise the state's minimum hourly wage. The current measure, which would raise the minimum wage from $8 to $11 by 2016 and tie future increases to inflation, passed Tuesday in the state Senate and has the support of Gov. Deval Patrick.
Pinto called the move “misguided.”
“Here is the thing about unemployment: Raising the minimum wage creates unemployment,” he said.
“Raising the minimum wage will cause the cost of goods to rise and this hurts everyone's buying power, most especially the poor and the working poor who the legislation is intended to help,” Pinto continued.
Pinto also levied charges against the Affordable Care Act and Massachusetts Health Reform Act, which he said placed additional costs on business and made it more expensive for them to hire.
Now dealing with the last observation first, the most recent measure of statewide unemployment was at 6.4%, significantly better than a national average of over 7%. Certainly that data doesn’t support any claim of a harmful impact from the Massachusetts Health Reform Act.
More to the point, however, is the perennial Republican claim that raising the minimum wage has a negative impact on employment. The overwhelming bulk of research on that issue shows no measurable consequence.
A February 2013 study by the Center
for Economic and Policy Research
Economists have conducted hundreds of studies of the employment impact of the minimum wage. Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers.
The most likely reason for this outcome is that the cost shock of the minimum wage is small relative to most firms' overall costs and only modest relative to the wages paid to low-wage workers. In the traditional discussion of the minimum wage, economists have focused on how these costs affect employment outcomes, but employers have many other channels of adjustment. Employers can reduce hours, non-wage benefits, or training. Employers can also shift the composition toward
higher skilled workers, cut pay to more highly paid workers, take action to increase worker productivity (from reorganizing production to increasing training), increase prices to consumers, or simply accept a smaller profit margin. Workers may also respond to the higher wage by working harder on the job. But, probably the most important channel of adjustment is through reductions in labor turnover, which yield significant cost savings to employers.
Bloomberg News reported in April 2012: "[A] wave of new economic research is disproving those arguments about job losses and youth employment. Previous studies tended not to control for regional economic trends that were already affecting employment levels, such as a manufacturing-dependent state that was shedding jobs. The new research looks at micro-level employment patterns for a more accurate employment picture. The studies find minimum-wage increases even provide an economic boost, albeit a small one, as strapped workers immediately spend their raises.”
David Autor of the Massachusetts Institute of Technology, commenting on a study in The Review of Economics and Statistics in November 2010 concluded “The paper presents a fairly irrefutable case that state minimum wage laws do raise earnings in low wage jobs but do not reduce employment to any meaningful degree. Beyond this substantive contribution, the paper presents careful and compelling reanalysis of earlier work in this literature, showing that it appears biased by spatial correlation in employment trends.”
I could go on regarding this matter. The point is that the author of the Go Local Worcester article does an injustice in conflating his report of factual statistics with highly dubious political bias.