Scholarly Publications

2017
Credible Research Designs for Minimum Wage Studies: A Response to Neumark, Salas and Wascher
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ILR Review 70(3):559-592. May 2017.

Abstract
The authors assess the critique by Neumark, Salas, and Wascher (2014) of minimum wage studies that found small effects on teen employment. Data from 1979 to 2014 contradict NSW; the authors show that the disemployment suggested by a model assuming parallel trends across U.S. states mostly reflects differential pre-existing trends. A data-driven LASSO procedure that optimally corrects for state trends produces a small employment elasticity (–0.01). Even a highly sparse model rules out substantial disemployment effects, contrary to NSW’s claim that the authors discard too much information. Synthetic controls do place more weight on nearby states—confirming the value of regional controls—and generate an elasticity of −0.04. A similar elasticity (−0.06) obtains from a design comparing contiguous border counties, which the authors show to be good controls. NSW’s preferred matching estimates mix treatment and control units, obtain poor matches, and find the highest employment declines where the relative minimum wage falls. These findings refute NSW’s key claims.
2016
Minimum Wage Shocks, Employment Flows and Labor Market Frictions
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Journal of Labor Economics, 34(3):663-704. April 2016.

Abstract
We provide the first estimates of the effects of minimum wages on employment flows in the US labor market, identifying the impact by using policy discontinuities at state borders. We find that minimum wages have a sizable negative effect on employment flows but not on stocks. Separations and accessions fall among affected workers, especially those with low tenure. We do not find changes in the duration of nonemployment for separations or hires. This evidence is consistent with search models with endogenous separations.
2015
Tipped Wage Effects on Earnings and Employment in Full-Service Restaurants
and   –  Scholarly Publications

Industrial Relations: A Journal of Economy and Society, 54(4):622–647. October 2015.

Abstract
We exploit more than 20 years of changes in state-level tipped wage policy and estimate earnings and employment effects of the tipped wage using county-level panel data on full-service restaurants (FSR). We extend earlier work by Dube, Lester, and Reich (2010) and compare outcomes between contiguous counties that straddle a state border. We find a 10-percent increase in the tipped wage increases earnings in FSRs about 0.4 percent. Employment elasticities are sensitive to the inclusion of controls for unobserved spatial heterogeneity. In our preferred models, we find small, insignificant effects of the tipped wage on FSR employment.
The Ups and Downs of Minimum Wage Policy: The Fair Labor Standards Act in Historical Perspective
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Industrial Relations: A Journal of Economy and Society, 54(4):538-546. October 2015.

Abstract
I provide here a historical overview of the impact of minimum wage legislation, enacted over 75 years ago in the Fair Labor Standards Act (FLSA) of 1938 and as amended subsequently on numerous occasions.

Given elected officials’ caution today about raising the minimum wage in bad economic times, the timing of the passage of the FLSA is remarkable. After a long and heated political debate, Congress passed the FLSA in 1938, establishing a nationwide minimum wage of $0.25 per hour, with increases to $0.30 in 1939 and to $0.40 in 1945. Importantly, the federal minimum wage established a floor, not a ceiling. States and localities could enact higher minimum wages—although none did until the 1980s.

The Effects of Minimum Wages on the Economy and on Inequality
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Reich, Michael. “The Effects of Minimum Wages on the Economy and on Inequality.” In conference volume, Wage Policies for a Better Future: Minimum Wage Regimes and Income-Led Growth in Comparative Perspective, Korea Labor Institute. November 2015. In English and Korean.

2014
Teacher staffing and pay differences: public and private schools
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Monthly Labor Review, US Bureau of Labor Statistics. September 2014.

Abstract
A study using Current Population Survey data shows that, from 1996 to 2012, elementary, middle, and high school teachers earned less than other college graduates, but the gap was smaller for public school teachers and smaller still if they had union representation; moreover, the mitigating effects are stronger for female than male teachers, so the within-gender pay gaps are much larger for male teachers.
Liftoff: Raising Wages at San Francisco Airport
, and   –  Scholarly Publications

In When Mandates Work, Michael Reich, Ken Jacobs, and Miranda Dietz, eds. University of California Press. January 2014.

Abstract
Most of the first wave of living wage ordinances that were enacted in the mid-1990s involved minimum pay scales that were substantially above federal and state minimum wages. Typically they set a standard of $8.00 or more per hour when the minimum wage was $5.15. Policy makers gen- erally assumed that a living wage policy could not work in trade-based goods- or service-producing sectors that were subject to the forces of tech- nological change and global competition. Consequently, living wage ordi- nances typically covered only workers on municipal service contracts, or only about 3 percent to 5 percent of the low-wage workers in a city. The implementation of these ordinances often involved granting numerous waivers and exemptions, further reducing their impact. Consequently, the first ordinances were thought to have small spillover impacts on the local low-wage labor market (Freeman 2005).
When Do Mandates Work?
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In When Mandates Work, Michael Reich, Ken Jacobs, and Miranda Dietz, eds. University of California Press. January 2014.

Abstract
Beginning in the late 1990s, the City of San Francisco enacted a notable series of laws designed to improve pay and benefits, expand health care access, and extend paid sick leave for low-wage San Francisco residents and workers. Remarkably, and despite many warnings about dire negative effects, these new policies raised living standards significantly for tens of thousands of people, and without creating any negative effects on employment. While modest by most European and Canadian standards, San Francisco’s policies represent a bold experiment in American labor market policies that provides important lessons for the rest of the United States.
Labor Market Impacts of San Francisco’s Minimum Wage
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In When Mandates Work, Michael Reich, Ken Jacobs, and Miranda Dietz, eds. University of California Press. January 2014.

Abstract
In November 2003 San Francisco voters passed a ballot proposition to enact a minimum wage covering all employers in the city. The new standard set a minimum wage at $8.50 per hour—over 26 percent above the then-current California minimum wage of $6.75—and an annual adjustment for cost of living increases (reaching $10.55 in 2013). This standard, which first became effective in late February 2004, constituted the highest minimum wage in the United States and the first implemented universal municipal minimum wage in a major city. In a prospective study of this policy, Reich and Laitinen (2003) estimated that about 54,000 workers, amounting to 10.6 percent of the city’s workforce, would receive wage increases, either directly or indirectly, if such a policy were adopted and that the increased wage costs on average would amount to about 1 percent of business operating costs.
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