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Minimum Wage Increases in a Soft U.S. Economy

Author

Listed:
  • Addison, John T.

    (Department of Economics, Moore School of Business, University of South Carolina, Columbia, USA and Institute for Advances Studies, Vienna)

  • Blackburn, McKinley L.

    (Department of Economics, Moore School of Business, University of South Carolina, Columbia, USA)

  • Cotti, Chad D.

    (Department of Economics, University of Wisconsin-Oshkosh, USA)

Abstract

Do apparently large minimum wage increases in an environment of straightened economic circumstances produce clearer evidence of disemployment effects than is typically reported in the new economics of the minimum wage? The present paper augments the sparse literature covering the very latest increases in the U.S. minimum wage, using three different data sets and the principal estimation strategies for handling geographically-disparate trends. Despite the seemingly more favorable milieu for identifying displacement effects, and although our treatment calls into question one well-received estimation strategy, our preferred specification generally fails to support a finding of negative employment effects. That is to say, minimum-wage workers are apparently concentrated in sectors of the economy for which the labor demand response to statutory wage hikes is minimal. Popular concern with a “recessionary multiplier” thus seems overdone.

Suggested Citation

  • Addison, John T. & Blackburn, McKinley L. & Cotti, Chad D., 2011. "Minimum Wage Increases in a Soft U.S. Economy," Economics Series 273, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihsesp:273
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    File URL: https://irihs.ihs.ac.at/id/eprint/2085
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    References listed on IDEAS

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    3. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Neumark, David & Salas, J.M. Ian & Wascher, William, 2013. "Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?," IZA Discussion Papers 7166, Institute of Labor Economics (IZA).
    2. Piotr Lewandowski & Agnieszka Kaminska, 2015. "The effects of minimum wage on a labour market with high temporary employment," IBS Working Papers 7/2015, Instytut Badan Strukturalnych.

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    More about this item

    Keywords

    Minimum wages; Disemployment; Earnings; Low-wage sectors; Geographically-disparate employment trends; Recession;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J8 - Labor and Demographic Economics - - Labor Standards

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