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Do Minimum Wage Hikes Raise US Long Term Unemployment? Evidence Using State Minimum Wage Rates

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Mark D. Partridge, Jamie S. Partridge
Abstract

PARTRIDGE M. D. and PARTRIDGE J. S. (1999) Do minimum wage hikes raise US long term unemployment? Evidence using state minimum wage rates, Reg. Studies 33 , 713–726. Several recent studies have challenged the conventional notion that raising the minimum wage reduces employment. This study considers a related but relatively unexplored issue by examining the minimum wage's influence on long durations of unemployment. By considering long term unemployment rates, this study extends the previous minimum wage literature by examining the persistence of minimum wage effects. The empirical analysis considers state data from the latter 1980s, a unique period when many states raised their minimum wage above the federal level. The results suggest that a greater minimum wage increases long term unemployment rates. Further evidence indicates that increased minimum wage coverage also raises long term unemployment rates. Subsequent analysis yielded similar patterns for other aggregate labour market measures. Thus, state and federal policy makers should weigh these potential costs in deciding whether to increase minimum wage rates in the future. PARTRIDGE M. D. et PARTRIDGE J. S. (1999) Les retombées des augmentations du salaire minimum sur le chômage de longue durée? Des preuves provenant des salaires minimum aux Etats-Unis, Reg. Studies 33 , 713-726. Des études récentes ont mis en question l'idée reçue qu'une augmentation du salaire minimum entraîne une réduction de l'emploi. Cette étude-ci cherchè a considérer un sujet connexe mais relativement inexploré; autrement dit, les retombées du salaire minimum sur le chômage de longue durée. En examinant les taux de chômage de longue durée, cette étude élargit la documentation antérieure qui porte sur le salaire minimum en considérant la persistance des retombées du salaire minimum. On analyse des données qui proviennent de la fin des années 1980, une époque exceptionnelle où bon nombre des états ont augmenté leur salaire minimum au-dessus du niveau fédéral. Les résultats laissent supposer qu'un renchérissement du salaire minimum entraîne une hausse des taux de chômage de longue durée. Des preuves supplémentaires laissent voir qu'un accroissement de la proportion de smicards amène aussì a une hausse des taux de chômage de longue durée. Une analyse ultérieure a fourni des résultats comparables pour ce qui est des autres mesures globales du marché du travail. Ainsi, les décideurs, et au niveau de l'état et sur le plan fédéral, devraient évaluer cescoûts potentielsau moment où ils décident si, oui ou non, il faudra augmenter les taux de salaire minimum. PARTRIDGE M. D. und PARTRIDGE J. S. (1999) Führen Anhebungen von Mindestlöhnen in den Vereinigten Staaten zu langfristigem Ansteigen der Arbeitslosigkeit? Beweise, die sich auf staatliche Mindestlohnraten stützen, Reg. Studies 33 , 713–726. Verschiedene, kürzlich veröffentlichte Untersuchungen stellten die herkömmliche Meinung in Frage, daß ein Anheben der Mindestlöhne zur Herabsetzung der Zahl der Beschäftigten führt. Dieser Aufsatz zieht eine damit verbundene, doch relativ selten untersuchte Frage in Betracht, indem er den Einfluß des Mindestlohnes auf lang anhaltende Arbeitslosigkeit prüft. Mit Hilfe der langfristigen Arbeitslosigkeitsraten erweitert die Studie durch Untersuchung der anhaltenden Auswirkungen von Mindestlöhnen die Literatur über Mindestlöhne. Die empirische Analyse zieht offizielle Datan der späten achtziger Jahre heran, einer einmaligen Periode, insoweit als viele Staaten ihre Mindestlöhne über die auf Bundesebene gezahlten anhoben. Die Ergebnisse legen nahe, daß ein höherer Mindestlohn zum Ansteigen der langfristige Arbeitslosenraten führt. Weitere Beweise lassen erkennen, daß vermehrte Mindestlohndeckung auch langfristige Arbeitslosigkeitsraten anhebt. Die anschließende Analyse ergab ähnliche Muster für andere, den Gesamtarbeitsmarkt umfassende Maßnahmen. Auf staatlicher wie auf bundesstaatlicher Ebene sollten politische Entscheidungen deshalb diese potentiellen Kosten mit in Betracht ziehen, wenn sie zukünftige Anhebungen von Mindestlöhnen erwägen.

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Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 33 (1999)
Issue (Month): 8 (November)
Pages: 713-726
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Handle: RePEc:taf:regstd:v:33:y:1999:i:8:p:713-726

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Keywords: Long Term Unemployment Minimum Wage Minimum Wage Coverage Unemployment;

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