Minimum Wage Increases in a Soft U.S. Economy

Addison, John T.; Blackburn, Mckinley L. and Cotti, Chad D. (September 2011) Minimum Wage Increases in a Soft U.S. Economy. Former Series > Working Paper Series > IHS Economics Series 273


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Abstract: Do apparently large minimum wage increases in an environment of straightened economic circumstances produce clearer evidence of disemployment effects than is typically reported in the new economics of the minimum wage? The present paper augments the sparse literature covering the very latest increases in the U.S. minimum wage, using three different data sets and the principal estimation strategies for handling geographically-disparate trends. Despite the seemingly more favorable milieu for identifying displacement effects, and although our treatment calls into question one well-received estimation strategy, our preferred specification generally fails to support a finding of negative employment effects. That is to say, minimum-wage workers are apparently concentrated in sectors of the economy for which the labor demand response to statutory wage hikes is minimal. Popular concern with a "recessionary multiplier" thus seems overdone.;

Item Type: IHS Series
Keywords: 'Minimum wages' 'Disemployment' 'Earnings' 'Low-wage sectors' 'Geographically-disparate employment trends' 'Recession'
Classification Codes (e.g. JEL): J2, J3, J4, J8
Date Deposited: 26 Sep 2014 10:39
Last Modified: 27 Sep 2019 06:31
ISBN: 1605-7996

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