Minimum Wage Increases Research Articles

How important are minimum wage increases in increasing the wages of minimum wage workers?

AbstractPopular discussion presumes minimum wage increases primarily drive wage gains for minimum wage workers. We investigate this presumption using the Current Population Survey to assess the fraction of minimum wage workers receiving raises after 12 months. This fraction is moderately higher following state minimum wage increases, and positively correlated with several measures of labor market tightness. Finally, wage gains frequently follow industry and/or occupation switches, highlighting the importance of career progression for earnings growth among entry‐level workers. Career progression and increases in labor demand rather than minimum wage increases appear to drive most wage gains for minimum wage workers.

Minimum Wages around Birth and Child Health.

This paper studies the effects of minimum wages in Indonesia around the time of birth on child height-for-age Z scores (HAZ) up to five years of age. Using variations in annual fluctuations in real minimum wages in different Indonesian provinces, it finds that children exposed to increases in minimum wages in their birth years have higher HAZ in the first five years of their lives. The estimated impacts are based on difference-in-differences models with biological-mother fixed effects and year-of-birth fixed effects and are robust to inclusion of multiple time-varying factors. The impacts are prominent particularly among male children.

Do higher minimum wages decrease union membership in minimum-wage-intensive industries?

ABSTRACT Over the past decade, organized labour has played a significant role in advocating for minimum wage increases. In this paper, we investigate the effects of minimum wage increases on union membership among individuals in minimum wage intensive industries. We find no evidence of a change in union membership among high-skilled workers in these industries. Consistent with a ‘free-riding’ hypothesis, we find evidence that minimum wage increases predict declines in union membership among low-skilled workers in these industries. These workers are the minimum wage’s most direct beneficiaries.

The Impact of Increased Minimum Wage on Child Neglect Varies by Developmental Age of Child.

Children in poverty are at significantly greater risk of experiencing child maltreatment. Family economic security policies, such as minimum wage laws, offer a promising prevention strategy to support low-income families. This study utilized data from the Fragile Families and Child Wellbeing Study, a longitudinal birth cohort study, to examine the effect of changes in state-specific minimum wage laws on maternal self-reported child maltreatment and material hardship as it varies by developmental age of the child. A series of fixed effects models with an interaction between the minimum wage and the age of the focal child were used to estimate if there was variation by developmental period of the impact of minimum wage laws on the following outcome variables: all domains of child maltreatment, maternal work-related stress, reported material hardship, aggravation in parenting, and maternal depression. Results revealed significant effects of increased minimum wage on maternal self-reported child neglect and material hardship when children are 3 years of age, and this relationship became non-significant as children aged. No effect was observed by age for other forms of child maltreatment nor any other outcome variables. Study findings suggest minimum wage laws may have differential effects on child neglect depending on the developmental period in which they are received.

Minimum Wage Increases and Employer Performance: Role of Employer Heterogeneity

Despite a large minimum wage literature that analyzes employee outcomes, there is less evidence on firm performance, prices, and quality. Exploiting staggered changes in U.S. minimum wages during 2000–2008 and census data on more than 29,000 hotel properties, we find that doubling the minimum wage as currently debated would reduce average hotel revenues by 6% per year and their occupancy rates by 3.1%. Responses vary by employer quality and organizational form. Although luxury hotels pass through cost increases to their customers with no impact on their revenues, upscale hotels facing more price-sensitive customers reduce prices but still suffer losses in occupancy rates and revenues as they struggle with preserving the expected quality level. They are also most likely to see quality downgrades from their segment. The lower-end hotels also pass through cost increases to their customers but, unlike luxury hotels, face significant declines in occupancy rates and revenues. Overall, the performance effects of minimum wage increases are nonmonotonic across quality. We also find negative impacts on hotel entry rates, although the performance and entry effects appear to be short lived. Furthermore, the negative effects of minimum wages dominate in states without right-to-work regulation, suggesting the need for a more comprehensive approach to labor market regulation. This paper was accepted by Victoria Ivashina, finance. Funding: M. Ayyagari received financial support from National Science Foundation Research (U.S) [Grant SES-1660755/1660749]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2022.4650 .

The unintended effects of minimum wage increases on crime

The availability of higher-paying jobs for low-skilled individuals has been documented to reduce crime. This study explores the impact of one of the most prominent labor policies designed to provide higher wages for low-skilled workers — the minimum wage — on teenage and young adult arrests. Using data from the 1998–2016 Uniform Crime Reports and a difference-in-differences approach, we find that a 1 percent increase in the minimum wage is associated with a 0.2 to 0.3 percent increase in property crime arrests among 16-to-24-year-olds, an effect driven by an increase in larceny-related arrests. The magnitudes of our estimated elasticities suggest that a $15 Federal minimum wage, proposed as part of the Raise the Wage Act, could generate approximately 309,000 additional larcenies. Job loss emerges as an important mechanism to explain our findings, and supplemental analyses of affected workers in the National Longitudinal Survey of Youth 1997 show that this effect is concentrated among workers bound by minimum wage increases. Finally, we find no evidence that minimum wage hikes impact violent crime arrests.

Minimum wages and mental health: Evidence from Canada

International evidence on the effect of minimum wages on mental health has been mixed. Estimation has used different types of variation in the minimum wage. In some countries such as the UK, the minimum wage is set nationally. In the United States, it is largely set subnationally. The resulting across state and time variation has recently been used to estimate that minimum wage increases have a positive effect on mental health. We exploit similar and substantial subnational level variation for Canada, using a longitudinal health survey panel available from 1994 to 2011. Using difference-in-difference and triple difference methods with individual fixed effects, we find that minimum wage increases are associated with modest reductions in distress and depression symptoms, largely for males.

The minimum wage and parent time use.

This study used a differences-in-differences strategy with national time diary data from 2003 to 2018 to examine the effects of minimum wage changes on parents' time with children and in child-related activities. Findings indicate that a $1 increase in the minimum wage was associated with a small increase (2.6%) in the likelihood parents with one or more children under age 16 spent time actively caring for or helping children on weekends, and in more total time with children (a 2% increase in secondary child care time). In general, coefficients were larger for mothers' time use, particularly non-employed mothers, with potential implications for gender disparities in caregiving. Unmarried parents and parents of color showed increases in their time spent in activities related to children's health (~55% increase). Mothers showed an increase (8%) in the likelihood they spent any time in child education-related activities, and increases in child care time appeared concentrated among parents whose youngest child was 6-15 years of age. Findings suggest that increases in state minimum wages may lead to small increases in parents' time investments in children, with some variation among subgroups.

MINIMUM WAGE: TRENDS AND PRICE LEVEL DYNAMICS IN NIGERIA

The consequences of wage increase on macroeconomic variables have been enormous and worrisome and yet the phenomenon has not been well documented for Nigeria as little information currently exists especially on the linkage between wage increase and inflation and how policy can effectively influence real wage in Nigeria. Consequently, this paper illustrated how wage increase might be linked to the price level dynamics in a small structural model of analysis of an emerging economy. The paper employed standard methodological approach, Vector Autoregressive Model, to determine the sources of shock to price level in Nigeria. The Variance Decomposition results showed that increases in the minimum wage have contributed significantly to shocks in employment and inflation rate. It shows that shocks in wages cause unemployment and are necessarily inflationary in Nigeria. The findings and the conclusion of the study suggested the need for the policy makers to curtail excess liquidly in Nigeria and enforce the respect of monetary requirements and fiscal discipline. In the light of this suggestion, the policy makers should evaluate the productivity of labor and ensure that the aggregate supply is increased to offset the increase in minimum wage.

Meeting the COVID-19 Pandemic: Complex Health, Socioeconomic, Gender, and Cultural Nexuses in Mexico

COVID-19 met Mexico with a fragmented healthcare system, where governmental and private corruption limited the reconstruction of hospitals after the earthquakes in 2017. Monopolies in the purchase of drugs, lack of trained medical personnel, badly equipped hospitals, obesity, and chronic diseases produced excess mortality from SARS-COV-2. Further, industrialized countries monopolized vaccines and protective gear against the pandemic and the UN-COVAX system for buying them failed. Mexico was forced to purchase vaccines worldwide at speculative prices. The country received also specialists from Cuba, purchased ventilators, trained hospital staff, and separated hospitals only for COVID-19 attention, while 145 private hospitals provided medical attention at public prices. In December 2020 first vaccines arrived and in July 2022 71.3% of the adult population was immunised. The government rejected the pressure of the International Monetary Fund for supporting big companies. Instead, direct money transfers for survival to elderlies, students, youth in apprenticeship, and peasants planting timber and fruit trees alleviated rising poverty and unemployment during the confinement. The cash for youth also moved them away from organised crime and drug production. Agreements with supermarkets and producers lowered the inflation in basic food prices and systematic increases in minimum wage improved Mexicans' purchasing power parity. Less corruption permitted the construction of new megaprojects in the poorest regions. Infrastructure in these marginalised regions recovered formal jobs, generating also labour for Central American migrants, thus reducing the political tensions on both national borders. Additionally, energy transition and subsidies of internal oil prices strengthened economic stability and the peso against the US dollar without new foreign debts. This rigorous macroeconomic policy, free vaccination, the start of a new public health system, and direct cash transfers allowed Mexico to recover in March 2022 from the 12.5 million lost jobs. The unemployment rate was in March 2023 2.4%. The complex nexuses of socioeconomic, health, youth, and gender policies promoted also an alternative social care system, reduced excess mortality and improved the living conditions of the impoverished population in the indigenous southern regions.

Značaj finansijskih podsticaja za zdravstvene radnike tokom pandemije COVID-19

One of the basic tasks of HR managers is to provide the organization with people who can do the job efficiently and effectively. Since during the COVID-19pandemic, the most important thing was to preserve the health of the population, the key role in bringing the pandemic under control was played by healthcare workers, which is why it was very important to find techniques to motivate them. This paper aims to assess the degree of satisfaction of healthcare workers with financial compensation during the COVID-19 pandemic, compared to compensation under normal working conditions. The results indicate that financial compensation is the dominant factor in motivating work during the pandemic, that they believe that they are not paid enough for their work, and that the minimum wage increase they deserve should be in the amount of the COVID supplement payment. As even more than half of the respondents would not accept working in a COVID hospital without financial incentive, this paper gains special importance as a warning for all decision makers.

Capitalism and Distributive Justice: Musings of a Mormon Economist

Capitalism and Distributive Justice: Musings of a Mormon Economist

What We Pay in the Shadow: Labor Tax Evasion, Minimum Wage Hike and Employment

The interactions between minimum wage policy and tax evasion remain largely unknown. We study firm-level employment effects of a large and biting minimum wage increase in Latvia conditional on labor tax compliance. The Latvian labor market is characterized by the prevalence of envelope wages, i.e., unreported cash-in-hand complements to the official wage. We apply machine learning to classify firms between compliant and tax-evading using a unique combination of administrative and survey data. We then show that firms engaged in labor tax evasion are insensitive to the minimum wage shock. Our results suggest that these firms use wage underreporting as an adjustment margin, converting (part of ) the envelope into legal wage. Increasing minimum wage contributes to tax rule enforcement, but this comes at the cost of negative employment consequences for compliant firms.

Estimating the employment effect of the minimum wage through variation in compliance: Evidence from five US states

The implications of a binding minimum wage law on employment have been the subject of a lively and ongoing debate. Estimation of employment effects may be hindered by the non-random manner in which minimum wage laws are created. To overcome this, we explore the employment implications of the minimum wage in the US restaurant industry through an approach that exploits variation in compliance, as opposed to legislation. In the five US states without state minimum wages, violations of the US federal minimum wage are shown to be associated with decreased employment in the restaurant industry in the time period around the federal minimum wage increases of 2007 through 2009. The most robust specification shows an elasticity of employment with respect to unpaid wages of -0.233. Robustness checks use earlier time periods to show results do not reflect seasonal trends, vary the group of industries used as controls, and only use 2007 to show estimates are not confounded by a unique effect of the Great Recession on the restaurant industry.

The Impact of a Minimum Wage Increase on Hours Worked: Heterogeneous Effects by Gender and Sector

The Impact of a Minimum Wage Increase on Hours Worked: Heterogeneous Effects by Gender and Sector

뉴스 기사 크롤링을 활용한 국내 산업별 RPA 적용 동향 및 제언

In the 4th industrial revolution, companies are making efforts to replace human resources with automated machines by reflecting social phenomena such as digitalization, 52-h work week, and minimum wage increase.
 Robotic process automation (RPA), which has emerged rapidly owing to people working from home and non-face-to-face interaction during the COVID-19 pandemic, is being applied to various fields such as in the manufacturing and service industries. In this study, Korean RPA market trends are analyzed. This study proposes the future application of RPA through news articles crawled from Naver, related studies, and reports.

The Effect of State Minimum Wage Increases on Nonprofit Organizations

The impact of minimum wage increases on employment has been extensively examined with mixed results. We extend the literature by hypothesizing and showing a differential impact of state-level minimum wage increases on nonprofit organizations as opposed to for-profit organizations. While we find that increases in minimum wages reduce employment growth in both types of organizations, this decrease is substantially larger for nonprofit organizations. We also find that investment in automation, that is, information technology, rises in nonprofits postminimum wage increase, consistent with the substitution of capital for labor. Minimum wage increases also increase the likelihood of nonprofit exit. JEL: J38, J68, L

Earnings Inequality and the Minimum Wage: Evidence from Brazil

Increases in the minimum wage can substantially reduce earnings inequality. To demonstrate this, we combine administrative and survey data with an equilibrium model of the Brazilian labor market. We find that a 128 percent increase in the real minimum wage in Brazil between 1996 and 2018 had far-reaching spillover effects on wages higher up in the distribution. The increased minimum wage accounts for 45 percent of a large fall in earnings inequality over this period. At the same time, the effects of the minimum wage on employment and output are muted by reallocation of workers toward more productive firms.. (JEL D31, E23, E24, J31, J38, O15)

최저임금 인상에 대한 고용주와 피고용자의 인식연구: 외식산업을 중심으로

Purpose - This study analyzes the perception of the minimum wage increase on the foodservice industry from the perspective of employers and employees as a whole, and finds out how each perception differs from the principle expectation of the Korean minimum wage. Design, data, and methodology -This study conducted a big data analysis by crawling the comments of news articles including the minimum wage increase on online portal sites. Data first examined the difference in the emotional view of the system of minimum wage increase through sentiment analysis, and then, a qualitative content analysis was conducted to find out what caused the view. Result - The results found that a majority of stakeholder in the foodservice industry had a negative perception of the minimum wage increase. As a result of qualitative content analysis, the cause was explained in two categories and five sub-categories. Conclusions - All stakeholder in the foodservice industry have a negative perception of the minimum wage, and the causes are employment reduction, economic burden on restaurants, and policy inequality.

The Impact of Recent State and Local Minimum Wage Increases on Nursing Facility Employment.

Various U.S. states and municipalities raised their mandated minimum wages between 2017 and 2019. In some areas, minimum wages became high enough to bind for more professional workers, such as lower paid staff at nursing facilities. We add to the small prior literature on the effects of minimum wages on nursing facility staffing using novel establishment-level data on daily hours worked; these data allow us to examine changes in staffing hours along margins previously unexplored in the minimum wage literature. We find no evidence that minimum wage increases reduced hours worked among lower-paid nurses in nursing facilities. In contrast, we find that increases in state and local minimum wages increased hours worked per resident day by nursing assistants; increases occurred for the average of all days throughout the month and on weekend days. We also find that a higher minimum wage increased the share of days in the month that facilities meet at least 75% of the minimum recommended levels of staffing for nursing assistants. These results lessen concerns that minimum wage hikes may reduce the quality of resident care at nursing facilities.