Minimum Wage Increases Under Straightened Circumstances

By: Addison, John T. (University of South Carolina)
Blackburn, McKinley L. (University of South Carolina)
Cotti, Chad (University of Wisconsin, Oshkosh)

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6036&r=ltv

Do apparently large minimum wage increases in an environment of recession produce clearer evidence of disemployment effects than is typically observed in the new minimum wage literature? This paper augments the sparse literature on the most recent increases in the U.S. minimum wage, using three different data sets and the two main estimation strategies for handling geographically-disparate trends. The evidence is generally unsupportive of negative employment effects, still less of a ‘recessionary multiplier.’ Minimum wage workers seem to be concentrated in sectors of the economy for which the labor demand response to wage mandates is minimal.
Keywords: minimum wages, disemployment, earnings, low-wage sectors, geographically-disparate employment trends, recession
JEL: J2