Jobs Gamble

Minimum wage research

Following the most recent increase in the federal minimum wage in 2009, 23 states increased their minimum wages still further. Those states now average about 11.5 percent higher than the federal minimum. Over the past two years, some cities, including Los Angeles and Seattle, have begun experiments that would push local minimum wages to as much as $15 an hour.

Many supporters argue that academic research on minimum wages show that they don't result in reduced employment. But late in 2015, Alan B. Krueger—a former White House economic adviser whose work on the minimum wage found essentially no job loss in some instances—warned that the latest round of wage hikes might be taking things too far.

A federal minimum wage set at $15, he wrote in The New York Times, "is beyond international experience, and could well be counterproductive. Although some high-wage cities and states could probably absorb a $15-an-hour minimum wage with little or no job loss, it is far from clear that the same could be said for every state, city and town in the United States."

Indeed, the current state of the minimum wage may already have cost jobs. In December, the University of California, Irvine economist David Neumark, whose work has consistently found higher minimum wages to be associated with job losses, concluded that "a reasonable estimate based on the evidence is that current minimum wages have directly reduced the number of jobs nationally by about 100,000 to 200,000, relative to the period just before the Great Recession."