What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States?

by Rod Williams - One can find people who adamantly claim increasing the minimum wage causes unemployment and job loss but one can also find those who adamantly claim it does not.

The National Bureau of Economic Research is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end dates for recessions in the United States.  There is no source more respected and which speaks with greater authority than the NBER.

The NBER examined the issue and published a working paper this month titled, Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States?

These are the conclusions:

(i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided. First, there is a clear preponderance of negative estimates in the literature.

Also, it should be pointed out that the evidence is overwhelming and significant. 

In our data, 79.3% of the estimated employment elasticities are negative, 55.4% are negative and significant at the 10% level or better, and 47.9% are negative and significant at the 5% level or better.

To read the full 49-page report follow this link. 

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