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The Effect of Recent Increases in the U.S. Minimum Wage: Results from Three Data Sources

Author

Listed:
  • John T. Addison

    (Department of Economics, Moore School of Business, University of South Carolina, USA; RCEA, Italy)

  • McKinley L. Blackburn

    (Department of Economics, Moore School of Business, University of South Carolina, USA)

  • Chad D. Cotti

    (Department of Economics, University of Wisconsin-Oshkosh, USA)

Abstract

This paper investigates the impact on earnings and employment of substantive increases in the minimum wage under the Fair Minimum Wage Act of 2007. Against the backdrop of a thin contemporary literature offering mixed results, our study uses three different data sets, and three different estimation strategies for addressing geographically-disparate trends. Despite the concatenation of seemingly large wage increases and a soft labor market, our evidence is generally unsupportive of material disemployment effects among industrial and demographic groups typically associated with low-wage employment. Our results are consistent with minimum wage workers being concentrated in sectors of the economy for which the labor-demand response to wage increases is seemingly modest.

Suggested Citation

  • John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2012. "The Effect of Recent Increases in the U.S. Minimum Wage: Results from Three Data Sources," Working Paper series 58_12, Rimini Centre for Economic Analysis.
  • Handle: RePEc:rim:rimwps:58_12
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    File URL: http://www.rcea.org/RePEc/pdf/wp58_12.pdf
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    References listed on IDEAS

    as
    1. Addison, John T. & Blackburn, McKinley L. & Cotti, Chad D., 2009. "Do minimum wages raise employment? Evidence from the U.S. retail-trade sector," Labour Economics, Elsevier, vol. 16(4), pages 397-408, August.
    2. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, January.
    3. Barry T. Hirsch & Bruce E. Kaufman & Tetyana Zelenska, 2015. "Minimum Wage Channels of Adjustment," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(2), pages 199-239, April.
    4. Stephen Bazen & Julie Le Gallo, 2009. "The Differential Impact Of Federal And State Minimum Wages On Teenage Employment," Working Papers halshs-00382509, HAL.
    5. 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.
    6. Saul D. Hoffman & Chenglong Ke, 2010. "Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers," Working Papers 10-07, University of Delaware, Department of Economics.
    7. Saul D. Hoffman & Chenglong Ke, 2011. "Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers (Revised Version)," Working Papers 11-16, University of Delaware, Department of Economics.
    8. Peter Dolton & Chiara Rosazza Bondibene, 2012. "The international experience of minimum wages in an economic downturn," Economic Policy, CEPR;CES;MSH, vol. 27(69), pages 99-142, January.
    9. Arindrajit Dube & T. William Lester & Michael Reich, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 945-964, November.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. John T. Addison & McKinleyl Blackburn, 1999. "Minimum Wages and Poverty," ILR Review, Cornell University, ILR School, vol. 52(3), pages 393-409, April.

    More about this item

    Keywords

    minimum wages; disemployment; earnings; low-wage sectors; geographically-disparate employment trends; recession;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J8 - Labor and Demographic Economics - - Labor Standards

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