In an opinion article promoting his $15 minimum wage bill, Minimum wage increase: results may surprise, David Clark stated:
But the relationship between minimum wage and unemployment is not clear cut. Let me give an example. Over nine years between 1990 and 1999, the National government increased the minimum wage by a total of just 70c.
Unemployment soared. By contrast, when Labour increased the minimum wage $5 over the following nine years, unemployment plummeted to the lowest levels in the OECD.
He’s right, the relationship is not clear cut, despite his attempt to suggest there’s a link favourable to his bill. I think unemployment rates tend to reflect international economic conditions.
But Clark’s claim on 1990′s unemployment rates has been disputed on the ODT website:
Submitted by photonz on Wed, 22/08/2012 – 9:53am.
David Clark says “Over nine years between 1990 and 1999, the National government increased the minimum wage by a total of just 70c. Unemployment soared.”
Unemployment over the decade went from 7.2% at the start of 1990 and finished at 7.3%at the end of 1999.
Clark made the same claim on his Facebook page so I asked him about it there:
I searched for unemployment statistics and found this:
That seems to refelct what ‘photonz’ claimed in the ODT.
Clark is partly right, unemployment did ‘soar’ in the nineties, but it also came down even more, so his claim is nonsense. The rate tyhen rose a little but was then trending down again when National lost the election in November 1999.
And the rise in unemployment in 1990 was well under way when Labour were in government, having gone from 7.3 in January 1990 to 8.1 in November, continuing to rise to 11.2 in October 1991. The ‘soaring’ began under Labour.
Sloppy or deliberate deceitful?
Clark’s claim that “Over nine years between 1990 and 1999, the National government increased the minimum wage by a total of just 70c. Unemployment soared.” is not supported by facts.
This looks like either very sloppy cherry picking of small trends and applying them to larger time periods – crude political point scoring?
Or deliberate misuse of statistics.
I’ll ask Clark to explain – it’s possible he has some other statistics which measure unemployment differently.
David has responded on Facebook, he doesn’t dispute those statistics. Incredibly, he claims they support his view:
David Clark for Dunedin North Pete when unemployment ranges between 6 & 11% despite stingy minimum wage increases, and it then drops when more significant minimum wage increases are introduced, I think that pretty clearly illustrates my point.
What the data shows is that during a time of “stingy minimum wage increases” unemployment DROPPED from 11% to just over 6%. I don’t see how that illustrates his point.
I doubt David is deliberately cherry picking data to fit his argument, it looks more like he just thinks the data says what he wants it to say.
It’s amazing hat for one of Labour’s main election policies their supportng research is still so shallow and flaky.