The potential economic impact of increasing the minimum wage in Massachusetts
AbstractIn this report I review the arguments on both sides of the issue. In doing so, I discuss and critique, where applicable, the evidence presented in the two reports that have been issued on either side of the debate. I also produce my own projection of the likely impact of raising the minimum wage on aggregate employment and wages. These calculations use the two reports as a baseline, modifying some of the assumptions to better reflect evidence supported by the economic literature. According to my estimates, the current proposal to increase the minimum wage could have a negative impact on employment ranging from 2,100 to 10,500 jobs, or 1 to 4 percent of workers whose wages would be affected by the bill. On net, the combined impact of the two wage increases would raise aggregate wages by approximately $255 million.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Boston in its series New England Public Policy Center Research Report with number 06-1.
Date of creation: 2006
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