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The minimum wage and Latino workers

  • Orrenius, Pia M.

    ()

    (Federal Reserve Bank of Dallas)

  • Zavodny, Madeline

Because Latinos comprise a large and growing share of the low-skilled labor force in the U.S., Latinos may be disproportionately affected by minimum wage laws. We compare the effects of minimum wage laws on employment and earnings among Hispanic immigrants and natives compared with non-Hispanic whites and blacks. We focus on adults who have not finished high school and on teenagers, groups likely to earn low wages. Conventional economic theory predicts that higher minimum wages lead to higher hourly earnings among people who are employed but lower employment rates. Data from the Current Population Survey during the period 1994?2005 indicate that there is a significant disemployment effect of higher minimum wages on Latino teenagers, although it is smaller for foreign- than native-born Latinos. Adult Latino immigrants are less affected by minimum wage laws than other low-education natives. We investigate whether skill levels and undocumented status help explain these findings.

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File URL: http://dallasfed.org/assets/documents/research/papers/2007/wp0708.pdf
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Paper provided by Federal Reserve Bank of Dallas in its series Working Papers with number 0708.

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Length: 37 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:fip:feddwp:0708
Note: Published as: Orrenius, Pia M. and Madeline Zavodny (2011), "The Minimum Wage and Latino Workers," in Latinos and the Economy: Integration and Impact in Schools, Labor Markets and Beyond, ed. David L. Leal and Stephen Trejo (New York: Springer), 169-191.
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  1. Pia M. Orrenius & Madeline Zavodny, 2008. "The Effect of Minimum Wages on Immigrants' Employment and Earnings," ILR Review, Cornell University, ILR School, vol. 61(4), pages 544-563, July.
  2. Madeline Zavodny, 1998. "Why minimum wage hikes may not reduce employment," Economic Review, Federal Reserve Bank of Atlanta, issue Q 2, pages 18-28.
  3. David Neumark & William Wascher, 1995. "The Effects of Minimum Wages on Teenage Employment and Enrollment: Evidence from Matched CPS Surveys," NBER Working Papers 5092, National Bureau of Economic Research, Inc.
  4. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," ILR Review, Cornell University, ILR School, vol. 46(1), pages 22-37, October.
  5. Lawrence F. Katz & Alan B. Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," NBER Working Papers 3997, National Bureau of Economic Research, Inc.
  6. Neeraj Kaushal, 2006. "Amnesty Programs and the Labor Market Outcomes of Undocumented Workers," Journal of Human Resources, University of Wisconsin Press, vol. 41(3).
  7. David Neumark & William Wascher, 2011. "Does a Higher Minimum Wage Enhance the Effectiveness of the Earned Income Tax Credit?," ILR Review, Cornell University, ILR School, vol. 64(4), pages 712-746, July.
  8. repec:fth:prinin:300 is not listed on IDEAS
  9. Winegarden, C R & Khor, Lay Boon, 1991. "Undocumented Immigration and Unemployment of U.S. Youth and Minority Workers: Econometric Evidence," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 105-12, February.
  10. David Card & Alan B. Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," NBER Working Papers 4509, National Bureau of Economic Research, Inc.
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  12. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
  13. Lang, Kevin & Kahn, Shulamit, 1998. "The effect of minimum-wage laws on the distribution of employment: theory and evidence," Journal of Public Economics, Elsevier, vol. 69(1), pages 67-82, July.
  14. Mark Turner & Berna Demiralp, 2001. "Do higher minimum wages harm minority and inner-city teens?," The Review of Black Political Economy, Springer;National Economic Association, vol. 28(4), pages 95-116, June.
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  16. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 869-924, December.
  17. David Card, 1992. "Do Minimum Wages Reduce Employment? A Case Study of California, 1987–89," ILR Review, Cornell University, ILR School, vol. 46(1), pages 38-54, October.
  18. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," Working Papers 680, Princeton University, Department of Economics, Industrial Relations Section..
  19. repec:pri:indrel:300 is not listed on IDEAS
  20. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, December.
  21. Jasso, Guillermina & Massey, Douglas S. & Rosenzweig, Mark R. & Smith, James P., 2008. "From Illegal to Legal: Estimating Previous Illegal Experience among New Legal Immigrants to the United States," IZA Discussion Papers 3441, Institute for the Study of Labor (IZA).
  22. Lawrence Katz & Alan Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Working Papers 678, Princeton University, Department of Economics, Industrial Relations Section..
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