The New Higher Minimum Wages: Effects on Earnings and Employment

Awarded Scholars:
Michael Reich, University of California, Berkeley
Sylvia Allegretto, University of California, Berkeley
Project Date:
Oct 2017
Award Amount:
$69,918

Economists continue to debate the effects of raising the minimum wage on employment, and, in particular, whether minimum wage increases have led to fewer jobs at the bottom of the labor market. One methodological issue has been how to construct a valid control group for what would have happened absent increases in the minimum wage. The proliferation of state increases and the implementation of automatic indexing of the minimum wage in some states and cities has increased the range and persistence of real minimum wage differences.  This, coupled with better estimation techniques, presents the opportunity to reassess the question of who benefits and who loses from minimum wage increases. 

Since January 2014, voters and local lawmakers have passed many bills and ballot measures raising the minimum wage in 27 states and the District of Columbia. In addition, many cities, such as Chciago and San Francisco, have adopted minimum wages above their state’s minimum. Economists Michael Reich and Sylvia Allegretto will examine the effects of very large changes in the minimum wage in eight states, nine cities, and low-income areas of some states. Reich and Allegretto plan to use public data, merged with their own database on city and state minimum wage policies, to analyze the effects of increases on wages and employment. 

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