Comment Re:9 States automatically increased (Score 1) 778
Actually, that is the interesting bit.
Of the 9 states that increased automatically, 8 are in the top half of the growth league - conversely 3 out of 4 of the states that voted an increase are in the bottom half.
(link to chart: http://www.cepr.net/images/sto...)
The thing about that correlation is that there is actually a plausible mechanism for causation - predictability. When a business decides to invest in hiring more people, you want to try and work out the costs, the potential for profit and the risk of failure. If you are hiring at or near minimum wage, then the level of minimum wage comes into that business plan. If any increase is automatic then you can simply add it in to costs (based on inflation assumptions which you need elsewhere anyway) - it will go up, but that can be accounted for. If any increase is _not_ automatic, then it becomes an unknown in your costs, a _risk_, dependent on politicians. Even in states that did _not_ raise it but _might_ have, that unknown, political risk, may have adversely affected investment decisions.
Businesses like a predictable environment more than anything.
If my suggested effect is real, then there is also a flip side - it will work like this in an expanding economy, but if the economy is contracting then having an automatic minimum wage increase could conceivably accelerate firing decisions - minimum wage jobs might be lost faster because of the known future costs.