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A $15 Federal Minimum Wage is Outside Historical Experience

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  • 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

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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Fillmore_2021_15-min-wage-outside-historical-exp.pdf
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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Fillmore_2021_15-min-wage-outside-historical-exp_rev1.pdf
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    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)

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    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

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