Labor Market Is Doing Fine With Higher Minimum Wages
Predictions of job losses and slower economic growth haven’t panned out.
Bloomberg, January 24, 2019
Almost three years ago, we got a chance to watch a real-time experiment of the impact higher minimum wages would have on job creation after some localities passed laws to raise pay floors. Although opponents immediately decried the increases as job killers and as proof that leftists are intent on destroying the economy, the wiser course was to wait and see what the data produced.
We now have a growing body of evidence that tips the scale in favor of the proponents, bolstered by several decades of research on the subject. At this point, the clear conclusion is that modest increases in minimum wages implemented slowly over time don’t destroy jobs or hurt growth.
The latest reminder comes in a new research paper by Doruk Cengiz, Arindrajit Dube, Attila Lindner and Ben Zipperer that looks at data during the period from 1979 to 2016 in 138 U.S. states and regions where minimum pay was increased. The conclusion is that low-wage workers had a pay gain of 7 percent after a minimum-wage law was enacted, but there was little or no change in employment.
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I originally published this at Bloomberg, January 24, 2019. All of my Bloomberg columns can be found here and here.
