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Experts Agree: Raising the Minimum Wage Won’t Hurt Employment

Feb 18, 2014

Harvard Economist Lawrence Katz: Higher Quality Studies Would Have Found Smaller or Negligible Impact on Total Employment: Several top labor economists said on Tuesday that the budget office was overstating the proposal's effect on the job market. Lawrence Katz of Harvard, for instance, said that the budget office had used "a lot of off-the-shelf estimates" of the jobs effect, and that if it had emphasized findings from higher-quality studies, it would have found a smaller or negligible impact on total employment. [NY Times, 2/19/14]

"These estimates suggest no detectable employment losses from the kind of minimum wage increases we have seen in the United States." The most comprehensive independent research available looked at what's really happening on the ground by comparing data from neighboring counties and found that, all things being equal, raising the minimum wage does not lead to job loss. That includes among teenagers, restaurant workers, and people working in a weak economy.  [Dube, Lester, and Reich, 11/10]

Multiple studies corroborate the overall finding "of an insignificant employment effect (both practically and statistically) from minimum wage raises." By an overwhelming degree, studies have determined that raising the minimum wage would have a negligible impact on employment. A review of 64 studies conducted over a 35-year period showed the vast majority found at or near zero employment effects. "Our analysis confirms that there never was much accumulated empirical evidence of a negative employment effect from minimum wage regulation. In any case, there seems to be a consensus among labour economists that if there is an adverse employment effect, it is a small one." [Doucouliagos and Stanley, 2008]

"The weight of the evidence points to little or no employment response to modest increases in the minimum wage." A review of research conducted since approximately 2000 determined that the consensus shows little evidence that raising the minimum wage negatively impacts employment.  [CEPR, 2/13]

Over 600 leading economists say, "...the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market." Recently, over 600 economists including several Nobel Laureates signed a letter touting the economic benefits of raising the minimum wage to $10.10 per hour, and disputing the claim that raising the minimum wage would lead to significant job losses. [EPI]

Alan Krueger and David Card: "Contrary to the central prediction of the textbook model of the minimum wage... we find no evidence that the rise in New Jersey's minimum wage reduced employment at fast-food restaurants in the state... We find that the increase in the minimum wage increased employment." [9/94]

Bloomberg Editorial Board: "...But a wave of new economic research is disproving those arguments about job losses and youth employment. Previous studies tended not to control for regional economic trends that were already affecting employment levels, such as a manufacturing-dependent state that was shedding jobs. The new research looks at micro-level employment patterns for a more accurate employment picture. The studies find minimum-wage increases even provide an economic boost, albeit a small one, as strapped workers immediately spend their raises." [Bloomberg, 4/16/12]

Nobel Laureate Paul Krugman: "Modest increases in wages for the least-paid don't necessarily reduce the number of jobs."  In an op-ed for the New York Times, Krugman wrote, "Now, you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there's evidence on that question - lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many 'natural experiments' here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment... And one byproduct of this human complexity seems to be that modest increases in wages for the least-paid don't necessarily reduce the number of jobs." [NYT, 2/17/13]

Former Secretary of Labor Robert Reich: the minimum wage "has been raised consistently, and it has never actually killed jobs."  Speaking on NPR, former Secretary Reich stated, "And that's been their argument every time the minimum wage has been raised. It has been raised consistently, and it has never actually killed jobs. In fact, there has been no relationship between raising the minimum wage and losing jobs." [NPR, 2/25/13]

 

By: DPCC