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

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. 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 age 16–17—as well as, more generally, changes in teen employment and school … Read more

Does Increasing the Minimum Wage Raise Prices?

According to a new job market paper, yes: Minimum wage laws in the US typically institute a schedule of increases rather than one-off hikes. After the corresponding legislation is passed, the minimum wage increases in steps over several years to the final value set in the law. Especially the later steps are known long in … Read more

Labor Protectionism: Minimum Wage and the Labor Market Effects of Immigration

A new working paper provides some interesting results about the interplay between immigration and minimum wage laws: Our first empirical strategy exploits the non-linearity of the minimum wage across U.S. States to investigate the role played by the minimum wage in shaping the impact of immigration on the wages and employment of competing native workers. … Read more

Minimum Wage Hikes and Automation Risks

A couple years ago, I wrote, Other studies show that an increased minimum wage causes firms to incrementally move toward automation. Now, this too could be seen as a trade-off: automation and technological progress tend to make processes more efficient and therefore increase productivity (and eventually wages), raising living standards for consumers (which include the poor). Nonetheless, the point is that … Read more

Minimum Wage: The Danish Experience

Ready for the second minimum wage paper in a row today? A new working paper looks at the Danish experience, where the minimum wage increases drastically when individuals turn 18 years old. So what happens when individuals become adults? “Danish minimum wages cause an increase in average wages of 40 percent when workers reach age … Read more