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The potential economic impact of increasing the minimum wage in Massachusetts

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  • Alicia Sasser

Abstract

In 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.

Suggested Citation

  • Alicia Sasser, 2006. "The potential economic impact of increasing the minimum wage in Massachusetts," New England Public Policy Center Research Report 06-1, Federal Reserve Bank of Boston.
    • Handle: RePEc:fip:fedbcr:06-1
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    Keywords

    Minimum wage - Massachusetts;

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