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

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

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 and Employment: Is the Evidence “Well-Established”?

GMU economist Don Boudreaux wrote an open letter to Bloomberg‘s Barry Ritholtz on his blog Cafe Hayek. It was in response to Ritholtz’s recent article on the minimum wage, which claims that “modest increases in minimum wages don’t lead to job losses.” This, in Ritholtz’s view, is “well-established” in the literature. Ritholtz certainly has studies that … Read more

The Consequences of Minimum Wage: Youth Edition

Time for yet another study on the minimum wage, this time by economist Charlene Marie Kalenkoski from March of this year. Do minimum wage laws have negative effects on youth employment and income? Wait for it… … Yes. Yes they do.   Kalenkoski writes, Policymakers often propose a minimum wage as a means of raising … Read more

The Current State of Minimum Wage Research

I was reading a Facebook thread recently in which a commenter was complaining about Walmart’s supposedly “evil” business practices and low wages compared to, say, Costco. This same commenter then advocated for the now-popular $15 minimum wage. Readers of Difficult Run are well aware that some of us here have little love for minimum wage laws. … Read more

Minimum Wage and Low-Skill Employment: The Evidence

My friend Chris Smith recently authored a piece over at Approaching Justice on how minimum wage opponents get it wrong on economics. As I commented elsewhere, providing nuance to the discussion by pointing out some studies that find no effect on employment or by discussing trade-offs is important. But I think it is quite a stretch to say … Read more

Warren Buffet: What’s Better Than Raising the Minimum Wage?

If you read Difficult Run with any frequency, you know that we really, really don’t like the minimum wage. There are lots of reasons for this, but one of the biggest is that there’s a better solution to the problem that the minimum wage is supposed to tackle, which is helping the working poor. It’s … Read more

New NBER Study on Minimum Wage

On the heels of Nathaniel’s latest minimum wage post, I thought I’d point to a brand new NBER working paper titled “More Recent Evidence on the Effects of Minimum Wages in the United States.” As one summary explains, For years, [David] Neumark has battled claims by other economists, such as University of Massachusetts professor Arindrajit … Read more