New Research Shows That Raising the Minimum Wage Helps Low Income Workers Without Damaging the Job M
There is a growing body of research that demonstrates that minimum wage increases help low-paid workers without damaging the job market or overall economy. We reported on research from UC Berkeley in October and a new, more comprehensive study supports their findings.
Economist Arindrajit Dube of the University of Massachusetts at Amherst, a leading expert on the economic impact of the minimum wage, led a group of economic scholars in examining 138 minimum-wage hikes across the US between 1979 and 2016. They found that workers saw wage increases of 7% on average with with no reduction in low-wage employment five years out. And, the authors found that the higher minimum wages they studied had a positive spillover effect for workers who made up to $5 more than the new minimum wage. They also saw an increase in wage rates, without a reduction in jobs or damage to the overall economy.
However, the authors of the study caution that their study only included wage increases up to about 60% of the then local median wage, and that minimum wage increases above that might have negative consequences.
Their research appears as a working paper of the National Bureau of Economic Research and will soon be published in the Quarterly Journal of Economics.