This
process:Those that support the elimination of minimum wages are therefore effectively demanding greater unemployment.
Does not follow from this
process:We find little evidence of disemployment effects once we allow for geographic-specific trends. Indeed, in many sectors the evidence points to modest (but robust) positive employment effects
http://en.wikipedia.org/wiki/Contraposition
Just to be clear, none of the following sentences contradicts the others.
I'm not claiming that these are all true, just that they don't contradict. Proving or disproving one does not prove or disprove the others.
faber est suae quisque fortunae
Jon Irenicus:What a laugh. No, rather this "study" reflects your utter inability as an economist. "Monopsony" and "efficiency wages" already come under the laws of demand and supply, and their "naive" (please spare me this condescending waffle) approach. You, it seems, wish to introduce them ad hoc to explain away problems your study faces. Your control for the boom is amateurish and does not filter out its effects, and your measurements of "increasing" employment are plagued by all the problems Xahrx outlined. How about you come back when you've learned a little economics? Please do explain how raising the price of a good will increase demand for it (and please spare me the efficiency wages garbage - we're not even talking about a homogeneous good anymore, and it does not provide a theoretical reason for expecting employment to rise...)
I've actually given this quite a bit of thought. Since the study included the restaurant industry, I wonder how tipped employees were factored into the equation. The reason I bring it up is that the federal minimum wage for tipped employees ($2.13/hour) did not change at all during the period studied, and has remained the same since the early 90's. Though many states have a higher minimum wage for tipped employees than the federal law demands, only a few states don't have a tip credit, meaning an effective lower minimum wage for tipped employees than non-tipped employees. This could lead to some interesting scenarios.
I tend to believe that an increase in the minimum wage would have a positive effect on the business of low and mid-level restaurants such as Denny's, TGI Fridays and The Olive Garden. As much of the staff of these businesses are not affected by the minimum wage increase, an increase in staff to meet the greater demand would be perfectly reasonable. Take TGI Friday's, for example. During a busy dinner shift at a 50 table shop, there may be 2-4 hosts/hostesses, a few bartenders and perhaps 10 or 12 waiters/waitresses. The waitstaff, being tipped employees, will have wages significantly less (usually well less than half) than those of the hosts/hostesses, who generally make right around minimum wage. An increase in the minimum wage could very well lead to management deciding to go with one less hostess and two more waitresses, and have waitresses help out with the seating -- a savings in labor costs, but an increase in employee count.
Further, an increase in the minimum wage may very well have a positive effect on the business of lower-end retail stores such as Target, Walmart and Kmart, whose employees make right around minimum wage. The increase in business may alleviate some of the would-be layoffs. It probably wouldn't be a wash, but the increased business could certainly offset some of the staff reduction. Add to that increases in staffing in businesses whose costs are not affected (or less affected) by a minimum wage increase, and I guess I could see how unemployment could remain stagnant or even slightly decrease in the face of a minimum wage increase.
The key factor, however, is that employment is increasing in jobs that are exempt from the increase. I wonder if/how the study took that into account.