Home Economy Increasing the minimum wage will certainly cost work. A survey of...

Increasing the minimum wage will certainly cost work. A survey of economic research shows the possibility of a significant reduction in employment. : Economics


To provide an accurate insight into the study, Peter Shirley and I surveyed the authors of nearly all U.S. studies on estimating the impact of minimum wages on published employment. in the past 30 years. We asked them to report to us their best estimate of the impact of employment, as measured as “elasticity”, or the percentage change in employment for every 1% change in minimum wage. minimal. Most authors responded, and in a few cases we did not, we withdrew this estimate from their research.

The results were astonishing. In all the studies, 79% report that minimum wages reduce employment. In 46% of the studies, the negative effects were statistically significant. In contrast, only 21% of studies show a small positive effect of minimum wages on employment, and only a small percentage (4%) is statistically significant. A simple yet useful calculation shows that almost 80% of studies find a negative impact on employment if the effect is zero real if less than one in a million.

In all studies, the mean employment elasticity coefficient is negative 0.15, meaning that, for example, a 10% increase in minimum wage results in a 1.5% decrease in employment for those with low skills. Extending this to the $ 15 minimum wage, this 107% increase in states where the federal minimum wage of $ 7.25 currently dominates would mean low-skilled jobs would. 16% reduction (generally consistent with recent CBO research). That sounds like a significant job loss.



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