Does the Minimum Wage Help or Hurt the Poor?
My colleague Erik Randolph writes about the minimum wage. As you’re probably aware, President Biden included a federal minimum wage increase (over time to $15), in his American Rescue Plan. It’s unclear if the wage hike will remain as it moves through the Congressional reconciliation process. If not, it will likely remain a priority for him and Congressional Democrats in the coming days.
In their National Bureau of Economic Research working paper, the researchers assembled what they believe to be the entire set of published empirical economic studies on the minimum wage in the United States since 1992. They did not include unpublished papers, simulations, or studies using methods considered to be less empirically rigorous.
Of the total 66 papers they identified and examined, they found that 79 percent of them showed a negative impact.
In summarizing the demographic groups most impacted by the minimum wage, the authors said the following:
There is strong and consistent evidence of negative employment effects for teens, young adults, the less-educated, and directly-affected (low-wage) workers, with the estimated elasticities generally larger for the less-educated than for teens and young adults, and larger still for directly-affected workers.