The Economic Impact of a High National Minimum Wage: Evidence from the 1966 Fair Labor Standards Act

48 Pages Posted: 6 Apr 2020 Last revised: 27 Jan 2023

See all articles by Martha J. Bailey

Martha J. Bailey

University of California, Los Angeles (UCLA) - Department of Economics

Thomas Juster

University of Oxford

Bryan A. Stuart

George Washington University - Department of Economics

Date Written: April 2020

Abstract

This paper examines the short and longer-term economic effects of the 1966 Fair Labor Standards Act (FLSA) which increased the national minimum wage to its highest level of the 20th Century and extended coverage to an additional 9.1 million workers. Exploiting differences in the “bite” of the minimum wage due to regional variation in the standard of living and industry composition, this paper finds that the 1966 FLSA increased wages dramatically but reduced aggregate employment only modestly. However, the disemployment effects were significantly larger among African-American men, forty percent of whom earned below the new minimum wage in 1966.

Suggested Citation

Bailey, Martha Jane and Juster, Thomas and Stuart, Bryan A., The Economic Impact of a High National Minimum Wage: Evidence from the 1966 Fair Labor Standards Act (April 2020). NBER Working Paper No. w26926, Available at SSRN: https://ssrn.com/abstract=3569391

Martha Jane Bailey (Contact Author)

University of California, Los Angeles (UCLA) - Department of Economics ( email )

8283 Bunche Hall
Los Angeles, CA 90095-1477
United States

Thomas Juster

University of Oxford

Bryan A. Stuart

George Washington University - Department of Economics ( email )

United States

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