- Sep 19, 2011
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Hikes in the minimum wage have other effects besides just giving low-income workers a raise. Important new research suggests that minimum wage increases in the late 2000s resulted in the loss of some 1.4 million American jobs and hurt unskilled workers most of all.
A new study http://econweb.ucsd.edu/~mwither/pdfs/Effects of Min Wage on Wages Employment and Earnings.pdf
by researchers Jeffrey Clemens and Michael Wither from the University of California San Diego found that low-skilled workers were the most adversely affected by minimum wage increases, despite the fact that this was the group that such legislation sought to help.
The study shows that between July 23, 2007 and July 24, 2009, the federal minimum wage rose from $5.15 to $7.25 per hour. During this period, the employment-to-population ratio declined substantially—by 4 percentage points among adults aged 25 to 54, and by 8 percentage points among those aged 15 to 24.
Up to now, economists have disagreed as to the part that the federal minimum wage increases played in unemployment, but the new methodology employed carefully delineated control groups to isolate the variable of minimum wage in order to determine its precise effects.
The study also found that “binding minimum wage increases significantly reduced the likelihood that low-skilled workers rose to what we characterize as lower middle class earnings.”
http://econweb.ucsd.edu/~mwither/pdfs/Effects of Min Wage on Wages Employment and Earnings.pdf
A new study http://econweb.ucsd.edu/~mwither/pdfs/Effects of Min Wage on Wages Employment and Earnings.pdf
by researchers Jeffrey Clemens and Michael Wither from the University of California San Diego found that low-skilled workers were the most adversely affected by minimum wage increases, despite the fact that this was the group that such legislation sought to help.
The study shows that between July 23, 2007 and July 24, 2009, the federal minimum wage rose from $5.15 to $7.25 per hour. During this period, the employment-to-population ratio declined substantially—by 4 percentage points among adults aged 25 to 54, and by 8 percentage points among those aged 15 to 24.
Up to now, economists have disagreed as to the part that the federal minimum wage increases played in unemployment, but the new methodology employed carefully delineated control groups to isolate the variable of minimum wage in order to determine its precise effects.
The study also found that “binding minimum wage increases significantly reduced the likelihood that low-skilled workers rose to what we characterize as lower middle class earnings.”
http://econweb.ucsd.edu/~mwither/pdfs/Effects of Min Wage on Wages Employment and Earnings.pdf