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The minimum wage and Latino workers

Author

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  • Orrenius, Pia M.

    () (Federal Reserve Bank of Dallas)

  • Zavodny, Madeline

Abstract

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.

Suggested Citation

  • Orrenius, Pia M. & Zavodny, Madeline, 2007. "The minimum wage and Latino workers," Working Papers 0708, Federal Reserve Bank of Dallas.
  • 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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    References listed on IDEAS

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    1. 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..
    2. 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.
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    6. 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.
    7. Lawrence F. Katz & Alan B. Krueger, 1992. "The Effect of the Minimum Wage on the Fast-Food Industry," ILR Review, Cornell University, ILR School, vol. 46(1), pages 6-21, October.
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    9. 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.
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    19. 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).
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    Cited by:

    1. Orrenius, Pia M. & Zavodny, Madeline, 2011. "Trends in poverty and inequality among Hispanics," Working Papers 1109, Federal Reserve Bank of Dallas.

    More about this item

    Keywords

    Minimum wage; Immigrants; Hispanic Americans;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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