How important are minimum wage increases in increasing the wages of minimum wage workers?
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Published:2023-04-08
Issue:4
Volume:41
Page:594-612
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ISSN:1074-3529
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Container-title:Contemporary Economic Policy
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language:en
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Short-container-title:Contemporary Economic Policy
Author:
Clemens Jeffrey1,
Strain Michael R.2
Affiliation:
1. Economics Department University of California at San Diego La Jolla California USA
2. American Enterprise Institute Washington District of Columbia USA
Abstract
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.
Subject
Public Administration,Economics and Econometrics,General Business, Management and Accounting
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