The Minimum Wage Costs Jobs (Beyond a doubt. Do not be fooled.)

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The Minimum Wage Costs Jobs  (Beyond a doubt.  Do not be fooled.)
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Minimum Wages and Employment
David Neumark1
and William L. Wascher2
1
Department of Economics, 3151 Social Science Plaza,University of
California-Irvine, Irvine, CA 92697, USA, dneumark@uci.edu
2
Board of Governors of the Federal Reserve System,
Division of Research and Statistics, 20th Street and Constitution Ave.,
NW, Washington, DC 20551, USA, william.l.wascher@frb.gov
Abstract
We review the burgeoning literature on the employment effects of minimum wages – in the United States and in other countries – that was
spurred by the new minimum wage research beginning in the early
1990s. Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects
on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the
conclusion that the minimum wage reduces employment of low-skilled
workers is clearly incorrect. A sizable majority of the studies surveyed
in this monograph give a relatively consistent (although not always
statistically significant) indication of negative employment effects of
minimum wages. In addition, among the papers we view as providing
the most credible evidence, almost all point to negative employment
effects, both for the United States as well as for many other countries.
Two other important conclusions emerge from our review. First, we
see very few – if any – studies that provide convincing evidence of
positive employment effects of minimum wages, especially from tho...

Foundations and Trends R in
Microeconomics
Vol. 3, No 1–2 (2007) 1–182
c 2007 D. Neumark and W. L. Wascher
DOI: 10.1561/0700000015