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State Minimum Wage Differences: Economic Factors or Political Inclinations?

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  • William F Ford
  • Travis Minor
  • Mark F Owens

Abstract

This paper examines the importance of factors that influence a state's decision to adopt an above-federal minimum wage level. Our results indicate that state political leanings are the primary factor explaining differences in state minimum wage laws since 1991. Further, state cost of living differences do not appear to influence a state's decision to increase its minimum wage above the federal level. This result is interesting since proponents of raising the minimum wage cite the rising cost of living as a principal justification for an increase. Our findings should be of special interest to economists responsible for analyzing and forecasting labor cost trends within and among states where their employers operate or plan to relocate.

Suggested Citation

  • William F Ford & Travis Minor & Mark F Owens, 2012. "State Minimum Wage Differences: Economic Factors or Political Inclinations?," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 47(1), pages 57-67, January.
    • Handle: RePEc:pal:buseco:v:47:y:2012:i:1:p:57-67
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    Cited by:

    1. Otterby, Dawn & Crawley, Andrew & Gabe, Todd, 2023. "Effects of the Minimum Wage on U.S. County Labor Markets," MPRA Paper 116162, University Library of Munich, Germany.
    2. Carmen Lozano & Cesaire Chiatchoua, 2022. "Conditions Influencing Salary of the Automotive Industry in Mexico City—A Linguistic Fuzzy-Set Approach," Sustainability, MDPI, vol. 14(11), pages 1-22, May.

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