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How important are minimum wage increases in increasing the wages of minimum wage workers?

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  • Jeffrey Clemens
  • Michael R. Strain

Abstract

Popular discussion presumes minimum wage increases primarily drive wage gains for minimum wage workers. We investigate this presumption using the Current Population Survey to assess the fraction of minimum wage workers receiving raises after 12 months. This fraction is moderately higher following state minimum wage increases, and positively correlated with several measures of labor market tightness. Finally, wage gains frequently follow industry and/or occupation switches, highlighting the importance of career progression for earnings growth among entry‐level workers. Career progression and increases in labor demand rather than minimum wage increases appear to drive most wage gains for minimum wage workers.

Suggested Citation

  • Jeffrey Clemens & Michael R. Strain, 2023. "How important are minimum wage increases in increasing the wages of minimum wage workers?," Contemporary Economic Policy, Western Economic Association International, vol. 41(4), pages 594-612, October.
    • Handle: RePEc:bla:coecpo:v:41:y:2023:i:4:p:594-612
    DOI: 10.1111/coep.12608
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    References listed on IDEAS

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    Cited by:

    1. Erin Wolcott, 2024. "Did Racially Motivated Labor Policy Reverse Equality Gains for Everyone?," Opportunity and Inclusive Growth Institute Working Papers 090, Federal Reserve Bank of Minneapolis.

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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