After having the Weekly Jobless Claims numbers jump by 34,000, two weeks ago, and by 44,000, last week, today's numbers came in at a tepid increase of only 7,000 new claimants (See Full Story). This is a more typical rise in unemployment benefit claims; even in a weak economy. If we had continued at the rate of the last two weeks, we would have been losing jobs at a rate that was nearly 3 to 4 times higher than all the jobs that had been lost in the last 6 months. More than a million people would have become unemployed. That reality that would have clearly spelled "recession". This week's jump in the jobless claims number plays well into what I had previously written about the effect of the new minimum wage (See Full Story).
There is no way of telling whether or not I was right about jobs being lost as a result of the 9% increase in the minimum wage. The actual statistics get muddied by all the announced corporate layoffs and job cuts that may or may not have been implemented in that same time period. However, you cannot deny that there were substantial claims the week before and the week after that new minimum wage rate went into effect (See Full Story). The fact that job losses dropped significantly this week gives the appearance that I may have been right. Was it just a coincidence? Maybe? Who knows?
It should also be pointed out that minimum wage earners are generally new workers who might not have sufficient time in the job (usually called the "base time" or "base period") to qualify for unemployment insurance. This varies by State. Those in this situation will not show up in the Weekly Jobless Claims number because they will not be awarded any benefits.