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How Much Would Increasing the Minimum Wage Affect Food Prices?

Author

Listed:
  • Lee, Chinkook
  • Schluter, Gerald E.
  • O'Roark, Brian

Abstract

Will increasing the minimum wage increase food prices as well? This study shows that a simulated $0.50 increase in the minimum wage, if entirely passed on to consumers, would have increased food prices by less than 1 percent for most of the foods at foodstores and by 1 percent at eating and drinking places. Because these estimates were simulated using an economic model that assumed that firms did not alter their production processes when faced with higher minimum wages, these estimates are likely "upward bounds" of the price effects of a minimum wage increase.

Suggested Citation

  • Lee, Chinkook & Schluter, Gerald E. & O'Roark, Brian, 2000. "How Much Would Increasing the Minimum Wage Affect Food Prices?," Agricultural Information Bulletins 33598, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersab:33598
    DOI: 10.22004/ag.econ.33598
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    File URL: https://ageconsearch.umn.edu/record/33598/files/ai007473.pdf
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    References listed on IDEAS

    as
    1. Lee, Chinkook & O'Roark, Brian, 1999. "The Impact of Minimum Wage Increases on Food and Kindred Products Prices: An Analysis of Price Pass-Through," Technical Bulletins 33553, United States Department of Agriculture, Economic Research Service.
    2. Lee, Chinkook & O'Roark, Brian, 1999. "The Impact of Minimum Wage Increases on Food and Kindred Product Prices: An Analysis of Price Pass-Through," Technical Bulletins 184373, United States Department of Agriculture, Economic Research Service.
    3. Daniel Aaronson, 2001. "Price Pass-Through And The Minimum Wage," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 158-169, February.
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    Cited by:

    1. Jeannette Wicks-Lim & Jeffrey Thompson, 2010. "Combining Minimum Wage and Earned Income Tax Credit Policies to Guarantee a Decent Living Standard to All U.S. Workers," Published Studies peri_mw_eitc_oct2010, Political Economy Research Institute, University of Massachusetts at Amherst.
    2. Arango-Thomas, Luis Eduardo & Ardila, Luz Karine & Gómez, Miguel Ignacio, 2011. "Efecto del cambio del salario mínimo en el precio de las comidas fuera del hogar en Colombia," Chapters, in: López Enciso, Enrique & Ramírez Giraldo, María Teresa (ed.), Formación de precios y salarios en Colombia T.2, volume 2, chapter 21, pages 873-918, Banco de la Republica de Colombia.
    3. Sara Lemos, 2008. "A Survey Of The Effects Of The Minimum Wage On Prices," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 187-212, February.
    4. Koblianska, Inna & Seheda, Serhii & Khaietska, Olha & Kalachevska, Larysa & Klochko, Tetiana, 2022. "Determinants of potato producer prices in the peasant-driven market: the Ukrainian case," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(3), June.
    5. Rembisz, Włodzimierz, 2021. "Determining the Acceptable Price Level for Agri-Food Products and the Choice of the Processor," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 319784, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).

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