IDEAS home Printed from https://ideas.repec.org/p/ags/umaesp/303916.html
   My bibliography  Save this paper

The Impact of an Increase in the Federal Minimum Wage on the Egg Industry

Author

Listed:
  • Keller, Andrew
  • Boland, Michael
  • Çakır, Metin

Abstract

Increasing the federal minimum wage is a major issue in the 2020 presidential campaign. This paper’s objective is to evaluate the impact of an increase in the minimum wage on an industry, eggs, where labor is a key input. This analysis was carried out using an equilibrium displacement model. When spread across the industry, the total negative effects due to increasing the minimum wage does not appear to be economically significant. This is due in large part to the Iowa egg industry’s current equilibrium wage of $13.50 an hour. Consequently, imposing a $15.00 an hour minimum wage would be a difference of only $1.50 assuming the egg industry does not increase it further. However, to stay competitive, egg industry employers would likely need to increase its wage to some level above $15.00 should the minimum wage be increased to that level. Despite these seemingly small effects, egg producers may nonetheless struggle in the short run to respond to immediate labor expenses should the state (or nation) not phase in its minimum wage over the course of several years. Most likely, if Iowa were to increase its minimum wage to $15.00 an hour, it would follow the lead of other states and incrementally increase its minimum wage over the course of many years until reaching $15.00.

Suggested Citation

  • Keller, Andrew & Boland, Michael & Çakır, Metin, 2020. "The Impact of an Increase in the Federal Minimum Wage on the Egg Industry," Staff Papers 303916, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:303916
    DOI: 10.22004/ag.econ.303916
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/303916/files/Keller%20Boland%20Cakir%20staff%20paper.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.303916?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bruce L. Gardner, 1975. "The Farm-Retail Price Spread in a Competitive Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(3), pages 399-409.
    2. Abigail M. Okrent & Julian M. Alston, 2012. "The Effects of Farm Commodity and Retail Food Policies on Obesity and Economic Welfare in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 611-646.
    3. Joseph A. Atwood & Gary W. Brester, 2019. "Homogeneity of Degree 1 Production Functions and the Development of Dual Equilibrium Displacement Models," MSU Staff Papers 296627, Montana State University > Department of Agricultural Economics and Economics.
    4. Conner Mullally & Jayson L Lusk, 2018. "The Impact of Farm Animal Housing Restrictions on Egg Prices, Consumer Welfare, and Production in California," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(3), pages 649-669.
    5. Paarlberg, Philip L. & Seitzinger, Ann Hillberg & Lee, John G., 2007. "Economic Impacts of Regionalization of a Highly Pathogenic Avian Influenza Outbreak in the United States," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(2), pages 325-333, August.
    6. MacDonald, James M. & Hoppe, Robert A. & Newton, Doris, 2018. "Three Decades of Consolidation in U.S. Agriculture," Economic Information Bulletin 276247, United States Department of Agriculture, Economic Research Service.
    7. Otto, Daniel & Ibarburu, Maro & Schulz, Lee L., 2013. "Economic Importance of the Iowa Egg Industry," Staff General Research Papers Archive 35917, Iowa State University, Department of Economics.
    8. Sumner, Daniel A. & Matthews, William A. & Mench, Joy A. & Rosen-Molina, J. Thomas, 2010. "The Economics of Regulations on Hen Housing in California," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 42(3), pages 429-438, August.
    9. Malone, Trey & Lusk, Jayson L., 2016. "Putting the Chicken Before the Egg Price: An Ex Post Analysis of California's Battery Cage Ban," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-15, September.
    10. Andreyeva, T. & Long, M.W. & Brownell, K.D., 2010. "The impact of food prices on consumption: A systematic review of research on the price elasticity of demand for food," American Journal of Public Health, American Public Health Association, vol. 100(2), pages 216-222.
    11. Paarlberg, Philip L. & Seitzinger, Ann Hillberg & Lee, John G., 2007. "Economic Impacts of Regionalization of a Highly Pathogenic Avian Influenza Outbreak in the United States," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(2), pages 1-9, August.
    12. Lusk, Jayson L. & Anderson, John D., 2004. "Effects of Country-of-Origin Labeling on Meat Producers and Consumers," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(2), pages 1-21, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Colin A. Carter & K. Aleks Schaefer & Daniel Scheitrum, 2021. "Piecemeal Farm Regulation and the U.S. Commerce Clause," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 1141-1163, May.
    2. Liang, Jing, 2010. "Three essays on food safety and foodborne illness," ISU General Staff Papers 201001010800002782, Iowa State University, Department of Economics.
    3. Anne‐Célia Disdier & Carl Gaigné & Cristina Herghelegiu, 2023. "Do standards improve the quality of traded products?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1238-1290, November.
    4. Sohae Eve Oh & Tomislav Vukina, 2018. "Substitutability between organic and conventional poultry products and organic price premiums," Economia agro-alimentare, FrancoAngeli Editore, vol. 20(1), pages 75-92.
    5. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    6. Sohae Eve Oh & Tomislav Vukina, 2022. "The price of cage‐free eggs: Social cost of Proposition 12 in California," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1293-1326, August.
    7. Amanda M. Countryman & Amy D. Hagerman, 2017. "Retrospective Economic Analysis of Foot and Mouth Disease Eradication in the Latin American Beef Sector," Agribusiness, John Wiley & Sons, Ltd., vol. 33(2), pages 257-273, April.
    8. Wendkouni Jean‐Baptiste Zongo & Bruno Larue & Carl Gaigné, 2023. "On export duration puzzles," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 453-478, March.
    9. Conner Mullally & Jayson L Lusk, 2018. "The Impact of Farm Animal Housing Restrictions on Egg Prices, Consumer Welfare, and Production in California," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(3), pages 649-669.
    10. Shon M. Ferguson, 2023. "Unconstrained trade: The impact of EU cage bans on exports of poultry‐keeping equipment," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(2), pages 435-449, June.
    11. Ochs, Dan & Wolf, Christopher A. & Widmar, Nicole Olynk & Bir, Courtney & Lai, John, 2019. "Hen housing system information effects on U.S. egg demand," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    12. Cosnard, Lionel & Laborde, David, 2019. "Taxing Sugar and Sugary Products to Reduce Obesity: A CGE Assessment of Several Tax Policies," Conference papers 333067, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. repec:ags:aaea22:335949 is not listed on IDEAS
    14. MacLachlan, Matthew J. & Boussios, David & Hagerman, Amy D., 2021. "Market Responses to Export Restrictions from Highly Pathogenic Avian Influenza Outbreaks," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(1), January.
    15. Anne T. Byrne & David R. Just, 2023. "What is free food worth? A nonmarket valuation approach to estimating the welfare effects of food pantry services," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1063-1087, August.
    16. Longworth, Natasha & Jongeneel, Roel A. & Saatkamp, Helmut W., 2021. "Management of Disease-triggered Shocks in Complex Value Chains: An Ex Ante Analysis of Market Effects of HPAI Control in the Dutch Egg Supply Chain," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 12(03), September.
    17. Ferrier, Peyton M & Rucker, Randal R. & Thurman, Walter N. & Burgett, Michael, 2018. "Economic Effects and Responses to Changes in Honey Bee Health," Economic Research Report 276245, United States Department of Agriculture, Economic Research Service.
    18. Hopkins, Kelsey A. & McKendree, Melissa G.S. & Schaefer, K. Aleks, 2022. "Resolving the reality gap in farm regulation voting models," Food Policy, Elsevier, vol. 112(C).
    19. Malone, Trey & Schaefer, K. Aleks & Lusk, Jayson L., 2021. "Unscrambling U.S. egg supply chains amid COVID-19," Food Policy, Elsevier, vol. 101(C).
    20. Mitchell, James L. & Thompson, Jada M. & Malone, Trey, 2024. "Biological lags and market dynamics in vertically coordinated food supply chains: HPAI impacts on U.S. egg prices," Food Policy, Elsevier, vol. 126(C).
    21. Lan Yi & Jianping Tao & Caifeng Tan & Zhongkun Zhu, 2019. "Avian Influenza, Public Opinion, and Risk Spillover: Measurement, Theory, and Evidence from China’s Broiler Market," Sustainability, MDPI, vol. 11(8), pages 1-44, April.

    More about this item

    Keywords

    Farm Management; Labor and Human Capital;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:umaesp:303916. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/daumnus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.