Do Minimum Wage Hikes Drive Some Restaurants Out of Business?

From a recent NBER paper (quoting from an earlier draft):  As theory would suggest, we find robust evidence that the impact of the minimum wage depends on how close a restaurant is to the margin of exit, proxied by its rating. Looking at city-level minimum wage changes in the San Francisco Bay Area (the “Bay … Read more

Who Bears the Cost of the Minimum Wage?

From a forthcoming article in the American Economic Review (quoting from the draft version) on Hungarian minimum wage hikes: Most firms responded to the minimum wage by raising wages instead of destroying jobs. Our estimates imply that out of 290 thousand minimum wage workers in Hungary, around 30 thousand (0.076% of aggregate employment) lost their … Read more

Minimum Wage & Low-Skilled Workers: More Evidence

Ready for yet another post on the minimum wage? From a recent paper in the Journal of Public Economics: Our empirical analysis uses the fact that the 2007 through 2009 increases in the federal minimum wage were differentially binding across states. We base our “bound” designation on whether a state’s January 2008 minimum wage was … Read more

Have the Minimum Wage Hikes in South Korea Helped the Economy?

From The New York Times: Under President Moon Jae-in, South Korea has raised taxes and the minimum wage in the name of economic growth. So far, it hasn’t worked out as planned. Growth has slowed, unemployment has risen and small-business owners like Moon Seung are complaining. Mr. Moon, founder of an auto parts maker called … Read more

Do Bumps in the Minimum Wage Increase the Number of Job Seekers?

Some argue that increasing the minimum wage will increase the number of job seekers and, consequently, employment. From a new NBER paper: Do minimum wage increases affect search effort by job seekers? …We investigate the effect of minimum wage increases on job search effort utilizing data from the Current Population Survey (CPS) and the American … Read more

What Is the Impact of Minimum Wage Hikes on the Least-Skilled?

In case you needed more evidence that minimum wage hikes tend to hurt those with the least skills and education, here are the conclusions from a paper from earlier this year: This paper uses the ACS to generate early estimates of the employment effects of state minimum wage increases implemented between January 2013 and January 2015. … Read more

Minimum Wage: Canadian Edition

The Fraser Institute has a recent study on the minimum wage in Alberta. The results are telling: As part of its effort to reduce poverty, Premier Rachel Notley’s government will raise Alberta’s minimum wage from $10.20 per hour, the rate when the Notley government took office three years ago, to $15 in October 2018. But, … Read more

Do Minimum Wage Hikes Decrease Non-Wage Benefits?

Economist Art Carden writes at Forbes, A recent working paper from the National Bureau of Economic Research by the economists Jeffrey Clemens, Lisa B. Kahn, and Jonathan Meer should make us pause and question the wisdom of higher minimum wages. The economists explore how minimum wages affect the probability of employer-provided health coverage and find that … Read more

Does an Increase in the Minimum Wage Decrease Teen Employment?

Yes, according to previous research and according to a new working paper out of GMU’s Mercatus Center.[ref]Which has published other good work on the effects of the minimum wage.[/ref] The authors report, First, we sought to understand the sources of the decline in teen employment that began around 2000—in particular, the decline in employment among those … Read more