Explaining the Small Employment Effects of the Minimum Wage in the United States

35 Pages Posted: 15 Sep 2015

See all articles by John Schmitt

John Schmitt

Centre for Economic Policy Research (CEPR)

Date Written: October 2015

Abstract

This paper reviews the most recent wave of research — roughly since 2000 — on the employment effects of the U.S. minimum wage and concludes that the weight of evidence points to little or no employment response to modest increases. The paper then examines eleven possible adjustments to minimum‐wage increases that may explain why the measured employment effects are consistently small. Given the relatively low cost to employers of modest increases in the minimum wage, these adjustment mechanisms appear to be sufficient to avoid employment losses, even for employers with a large share of low‐wage workers.

Suggested Citation

Schmitt, John, Explaining the Small Employment Effects of the Minimum Wage in the United States (October 2015). Industrial Relations: A Journal of Economy and Society, Vol. 54, Issue 4, pp. 547-581, 2015, Available at SSRN: https://ssrn.com/abstract=2660532 or http://dx.doi.org/10.1111/irel.12106

John Schmitt (Contact Author)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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