IRLE Minimum Wage Group Influences National, State and Local Debates

This corpus of policy briefs, reports and academic research has greatly influenced the widespread public and academic debates about the future of U.S. minimum wage policy. The national media closely follows the release of IRLE publications and is quick to seek the opinions of many of our experts.

Much of the academic minimum wage research at IRLE is spearheaded by Professor Michael Reich and Dr. Sylvia Allegretto, co-chairs of the Center for Wage and Employment Dynamics (CWED) at IRLE.

Other minimum wage researchers at IRLE include Ken Jacobs, Chair of the Center for Labor Research and Education (CLRE) and Annette Bernhardt, Senior Researcher, CLRE. In addition to the CWED publications listed below, CLRE publishes a variety of research and resources on minimum wages, including the Inventory of US City and County Minimum Wage Ordinances.

CWED Minimum Wage Publications

Are Local Minimum Wages Absorbed by Price Increases? Estimates from Internet-based Restaurant Menus
and   –  Scholarly Publications

ILR Review, 71(1):35-63. January 2018.

The authors analyze 884 Internet-based restaurant menus from inside and outside San Jose, California, which they collected before and after the city implemented a 25% minimum wage increase in 2013. Their findings suggest that nearly all of the cost increase was passed through to consumers, as prices rose 1.45% on average. Minimum wage price elasticities averaged 0.058 for all restaurants and ranged from 0.044 to 0.109, depending on the type of restaurant. The authors’ estimate of payroll cost increases net of turnover savings is consistent with these findings. Equally important, border effects for restaurants are smaller than is often conjectured. Price differences among restaurants that are one-half mile from either side of the policy border are not competed away, indicating that restaurant demand is spatially inelastic. These results imply that city-wide minimum wage policies need not result in substantive negative employment effects nor shifts of economic activity to nearby areas.
Credible Research Designs for Minimum Wage Studies: A Response to Neumark, Salas and Wascher
, , and   –  Scholarly Publications

ILR Review 70(3):559-592. May 2017.

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.
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