Consider the following public policy experiments now taking place in the labs of democracy. According to the National Conference of State Legislatures:
fourteen states begin the new year with higher minimum wages. Of those, 12 states increased their rates through legislation passed in the 2014 or 2015 sessions, while two states automatically increased their rates based on the cost of living.
And, during the next few years, minimum wage increases are scheduled to take place in California, New York, Oregon and elsewhere.
Regardless of your views of the impact of a minimum wage is -- job killer, neutral or a net economic positive for a region -- we will get a huge run of data in the coming years. Whatever your beliefs may be, you should pay attention to this data to learn if they are well supported or not.
We also see similar experiments taking place in tax policy at the state level. During the past few years, we saw big tax cuts in Kansas, Louisiana and New Jersey, with big tax increases in others. There also have been big changes to various state pension plans, with increased investment in hedge funds in some states, while others have pulled their money out of them.
We may never have a laboratory for national economic experiments such QE, but at least we have an approximation at the state level. It's something worth watching.
This column was provided by Bloomberg View.