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

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  • Mark Partridge
  • Jamie 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 retombees des augmentations du salaire minimum sur le chomage de longue duree? Des preuves provenant des salaires minimum aux Etats-Unis, Reg. Studies 33 , 713-726. Des etudes recentes ont mis en question l'idee recue qu'une augmentation du salaire minimum entraine une reduction de l'emploi. Cette etude-ci cherche a considerer un sujet connexe mais relativement inexplore; autrement dit, les retombees du salaire minimum sur le chomage de longue duree. En examinant les taux de chomage de longue duree, cette etude elargit la documentation anterieure qui porte sur le salaire minimum en considerant la persistance des retombees du salaire minimum. On analyse des donnees qui proviennent de la fin des annees 1980, une epoque exceptionnelle ou bon nombre des etats ont augmente leur salaire minimum au-dessus du niveau federal. Les resultats laissent supposer qu'un rencherissement du salaire minimum entraine une hausse des taux de chomage de longue duree. Des preuves supplementaires laissent voir qu'un accroissement de la proportion de smicards amene aussi a une hausse des taux de chomage de longue duree. Une analyse ulterieure a fourni des resultats comparables pour ce qui est des autres mesures globales du marche du travail. Ainsi, les decideurs, et au niveau de l'etat et sur le plan federal, devraient evaluer cescouts potentielsau moment ou ils decident si, oui ou non, il faudra augmenter les taux de salaire minimum. PARTRIDGE M. D. und PARTRIDGE J. S. (1999) Fuhren Anhebungen von Mindestlohnen in den Vereinigten Staaten zu langfristigem Ansteigen der Arbeitslosigkeit? Beweise, die sich auf staatliche Mindestlohnraten stutzen, Reg. Studies 33 , 713-726. Verschiedene, kurzlich veroffentlichte Untersuchungen stellten die herkommliche Meinung in Frage, dass ein Anheben der Mindestlohne zur Herabsetzung der Zahl der Beschaftigten fuhrt. Dieser Aufsatz zieht eine damit verbundene, doch relativ selten untersuchte Frage in Betracht, indem er den Einfluss des Mindestlohnes auf lang anhaltende Arbeitslosigkeit pruft. Mit Hilfe der langfristigen Arbeitslosigkeitsraten erweitert die Studie durch Untersuchung der anhaltenden Auswirkungen von Mindestlohnen die Literatur uber Mindestlohne. Die empirische Analyse zieht offizielle Datan der spaten achtziger Jahre heran, einer einmaligen Periode, insoweit als viele Staaten ihre Mindestlohne uber die auf Bundesebene gezahlten anhoben. Die Ergebnisse legen nahe, dass ein hoherer Mindestlohn zum Ansteigen der langfristige Arbeitslosenraten fuhrt. Weitere Beweise lassen erkennen, dass vermehrte Mindestlohndeckung auch langfristige Arbeitslosigkeitsraten anhebt. Die anschliessende Analyse ergab ahnliche Muster fur andere, den Gesamtarbeitsmarkt umfassende Massnahmen. Auf staatlicher wie auf bundesstaatlicher Ebene sollten politische Entscheidungen deshalb diese potentiellen Kosten mit in Betracht ziehen, wenn sie zukunftige Anhebungen von Mindestlohnen erwagen.

Suggested Citation

  • Mark Partridge & Jamie Partridge, 2000. "Do Minimum Wage Hikes Raise US Long Term Unemployment? Evidence Using State Minimum Wage Rates," Regional Studies, Taylor & Francis Journals, vol. 33(8), pages 713-726.
    • Handle: RePEc:taf:regstd:v:33:y:2000:i:8:p:713-726
    DOI: 10.1080/00343409950079179
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    References listed on IDEAS

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    1. États-Unis : le drame du salaire minimum
      by Philippe Lacoude in Contrepoints on 2018-04-21 02:40:40

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