IDEAS home Printed from https://ideas.repec.org/p/hka/wpaper/2021-048.html
   My bibliography  Save this paper

A $15 Federal Minimum Wage is Outside Historical Experience

Author

Listed:
  • Ian Fillmore

    (Washington University in St. Louis)

Abstract

How informative is historical experience with the minimum wage about the consequences of raising the federal minimum to $15? This paper compares a hypothetical $15 federal minimum to the most recent federal minimum wage increase, in 2007, from $5.15 to $7.25. I describe a straightforward method for using publicly available data from the Occupational Employment and Wage Statistics (OEWS) program to assess whether a proposed minimum wage increase is within historical experience. I illustrate the method by comparing the occupations and industries most directly affected by the 2007 increase with those that would be affected by a $15 minimum wage. By any measure, a $15 minimum wage is far outside historical experience—in both its size and the breadth of occupations and industries it would affect—and the frontier of historical experience is a minimum wage between $9 and $11 per hour. I recommend that future minimum wage proposals, both federal and local, include a similar analysis to assess whether the proposal is within historical experience. Finally, I argue for future research to take advantage of several scheduled state-level minimum wage hikes to estimate heterogeneous employment effects by occupation and industry.

Suggested Citation

  • Ian Fillmore, 2021. "A $15 Federal Minimum Wage is Outside Historical Experience," Working Papers 2021-048, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2021-048
    Note: MIP
    as

    Download full text from publisher

    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Fillmore_2021_15-min-wage-outside-historical-exp.pdf
    File Function: First version, September 15, 2021
    Download Restriction: no
    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Fillmore_2021_15-min-wage-outside-historical-exp_rev1.pdf
    File Function: Second version, October 20, 2021
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Congressional Budget Office, 2019. "The Effects on Employment and Family Income of Increasing the Federal Minimum Wage," Reports 55410, Congressional Budget Office.
    2. Neumark, David & Wascher, William L., 2007. "Minimum Wages and Employment," Foundations and Trends(R) in Microeconomics, now publishers, vol. 3(1–2), pages 1-182, March.
    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. Fillmore, Ian, 2022. "A $15 federal minimum wage is outside historical experience," Research in Economics, Elsevier, vol. 76(1), pages 84-92.
    2. George L. Wehby & Robert Kaestner & Wei Lyu & Dhaval M. Dave, 2022. "Effects of the Minimum Wage on Child Health," American Journal of Health Economics, University of Chicago Press, vol. 8(3), pages 412-448.
    3. Adam, Antonis & Moutos, Thomas, 2011. "A politico-economic analysis of minimum wages and wage subsidies," Economics Letters, Elsevier, vol. 110(3), pages 171-173, March.
    4. Caroline Danielson & Deborah Reed & Qian Li & Jay Liao, "undated". "Sanctions and Time Limits in California's Welfare Program," Mathematica Policy Research Reports 09550879b2754a38b32e03488, Mathematica Policy Research.
    5. Jenny Kragl & Anja Schöttner, 2014. "Wage Floors, Imperfect Performance Measures, And Optimal Job Design," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(2), pages 525-550, May.
    6. Maria Marimpi & Pierre Koning, 2018. "Youth minimum wages and youth employment," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-18, December.
    7. Marianna Kudlyak & Murat Tasci & Didem Tuzemen, 2019. "Minimum Wage Increases and Vacancies," Working Papers 19-30R, Federal Reserve Bank of Cleveland, revised 21 Apr 2022.
    8. Ronald Backmann & Thomas K. Bauer & Jochen Kluve & Sandra Schaffner & Christoph M. Schmidt, 2008. "Mindestlöhne in Deutschland - Beschäftigungswirkungen und fiskalische Effekte," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 56, 05.
    9. Luis Medrano-Adán & Vicente Salas-Fumás & J. Sanchez-Asin, 2015. "Heterogeneous entrepreneurs from occupational choices in economies with minimum wages," Small Business Economics, Springer, vol. 44(3), pages 597-619, March.
    10. Mark D. Brenner, 2004. "The Economic Impact of Living Wage Ordinances," Working Papers wp80, Political Economy Research Institute, University of Massachusetts at Amherst.
    11. Dinkelman, Taryn & Ranchhod, Vimal, 2012. "Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa," Journal of Development Economics, Elsevier, vol. 99(1), pages 27-45.
    12. Lemos Sara, 2005. "Political Variables as Instruments for the Minimum Wage," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-31, December.
    13. Pia M. Orrenius & Madeline Zavodny, 2008. "The Effect of Minimum Wages on Immigrants' Employment and Earnings," ILR Review, Cornell University, ILR School, vol. 61(4), pages 544-563, July.
    14. Orsetta Causa & Alain de Serres & Nicolas Ruiz, 2015. "Can pro-growth policies lift all boats?: An analysis based on household disposable income," OECD Journal: Economic Studies, OECD Publishing, vol. 2015(1), pages 227-268.
    15. Neumark David, 2019. "The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns," German Economic Review, De Gruyter, vol. 20(3), pages 293-329, August.
    16. Eva Militaru & Madalina Ecaterina Popescu & Amalia Cristescu & Maria Denisa Vasilescu, 2019. "Assessing Minimum Wage Policy Implications upon Income Inequalities. The Case of Romania," Sustainability, MDPI, vol. 11(9), pages 1-20, May.
    17. Shirley, Peter, 2018. "The response of commuting patterns to cross-border policy differentials: Evidence from the American Community Survey," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 1-16.
    18. John Addison & McKinley Blackburn & Chad Cotti, 2015. "On the robustness of minimum wage effects: geographically-disparate trends and job growth equations," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-16, December.
    19. Kragl, Jenny & Schöttner, Anja, 2011. "Wage floors and optimal job design," Bonn Econ Discussion Papers 01/2011, University of Bonn, Bonn Graduate School of Economics (BGSE).
    20. Skedinger, Per, 2022. "The Economics behind the Directive on Adequate Minimum Wages in the EU: A Critical Assessment," Working Paper Series 1438, Research Institute of Industrial Economics.

    More about this item

    Keywords

    employment; Occupational Employment and Wage Statistics; OEWS;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hka:wpaper:2021-048. 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: Jennifer Pachon (email available below). General contact details of provider: https://edirc.repec.org/data/mfichus.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.