The determinants of state minimum wage rates: A public policy approach

Abstract The effect of minimum wages on employment is one of the most widely studied and most controversial topics in labor economics and public policy but its impact on early startups is poorly understood and under-researched. In this manuscript, we investigate whether minimum wage rates correlate with the probability that a nascent startup hires employees and achieves profitability, a topic that has never been addressed before. We found negative but not significant correlation between the minimum wage rates and a nascent venture’s probability of hiring employees. However, female entrepreneurs were significantly less likely than male entrepreneurs to hire when faced with higher minimum wage rates. For ventures with employees, higher minimum wage rates were correlated with lower probability of achieving profitability vs. quitting the startup process.

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The Impact of the Minimum Wage on Male and Female Employment and Earnings in India

Asian Development Review ◽

10.1162/adev_a_00080 ◽

2017 ◽

Vol 34 (1) ◽

pp. 28-64 ◽

Cited By ~ 6

Author(s):

Nidhiya Menon ◽

Yana van der Meulen Rodgers

Keyword(s):

Minimum Wage ◽

Cross Sections ◽

Urban Areas ◽

Wage Gap ◽

National Sample ◽

Female Employment ◽

Sample Survey ◽

Market Outcomes ◽

Wage Rates ◽

The Impact

This study examines how employment and wages for men and women respond to changes in the minimum wage in India, a country known for its extensive system of minimum wage regulations across states and industries. Using repeated cross sections of India's National Sample Survey Organization employment survey data for the period 1983–2008 merged with a newly created database of minimum wage rates, we find that, regardless of gender, minimum wages in urban areas have little to no impact on labor market outcomes. However, minimum wage rates increase earnings in the rural sector, especially for men, without any employment losses. Minimum wage rates also increase the residual gender wage gap, which may be explained by weaker compliance among firms that hire female workers.

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The Minimum Wage Debate: Politically Correct Economics?

The Economic and Labour Relations Review ◽

10.1177/103530469600700202 ◽

1996 ◽

Vol 7 (2) ◽

pp. 188-197 ◽

Cited By ~ 1

Author(s):

Tom Valentine

Keyword(s):

Minimum Wage ◽

Fast Food ◽

Wage Rate ◽

Traditional View ◽

Wage Rates ◽

Major Study ◽

Unskilled Labour ◽

Unskilled Workers ◽

New Material

Economists have long thought that an increase in minimum wage rates would lead to higher unemployment of unskilled workers. The higher minimum rates would cause employers to substitute other classes of labour or capital for unskilled labour and to contract output. Situations in which an increase in minimum wage rates will not increase unemployment do not seem to be practically relevant. The results of Card and Krueger have reopened this question. In their major study a survey of fast food outlets suggested that an increase in the minimum wage rate actually increased employment. Unfortunately, closer inspection of their results has not justified the attention paid to their study. The quality of their data is suspect and other data support the traditional view. In addition, the interpretation of their results is very questionable. The new material actually gives economists no reason to revise their traditional view on this subject.

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The Politics of the Minimum Wage. By Jerold Waltman. Urbana: University of Illinois Press, 2000. 172p. $24.95.

American Political Science Review ◽

10.1017/s000305540149201x ◽

2001 ◽

Vol 95 (1) ◽

pp. 225-226

Author(s):

Byron W. Daynes

Keyword(s):

Public Policy ◽

Minimum Wage ◽

Symbolic Politics ◽

University Of Illinois ◽

Made In

Upon receiving Jerald Waltman's book, the first thing I read was the dedication to the author's "coworkers at A. & W. Root Beer, Ruston, Louisiana, 196367." I like root beer, but I wondered whether a mistake had been made in sending me this book to review. It did not take long to realize no mistake had been made. This is a book that treats minimum wage as symbolic politics, but, more important, it entirely reexamines public policy.

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The Employment Effects of Lower Minimum Wage Rates for Young Workers: Canadian Evidence

Industrial Relations A Journal of Economy and Society ◽

10.1111/j.1468-232x.2011.00655.x ◽

2011 ◽

Vol 50 (4) ◽

pp. 629-655 ◽

Cited By ~ 5

Author(s):

MICHAEL SHANNON

Keyword(s):

Minimum Wage ◽

Young Workers ◽

Employment Effects ◽

Wage Rates

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The Effect of Changes in Minimum Wage Rates on Provincial Unemployment Rates, 1970-77

Relations industrielles ◽

10.7202/028984ar ◽

2005 ◽

Vol 34 (3) ◽

pp. 418-430 ◽

Cited By ~ 1

Author(s):

Dennis R. Maki

Keyword(s):

Minimum Wage ◽

Average Wage ◽

Unemployment Rates ◽

Wage Rates

This paper estimates the effect of different minimum wage to average wage ratios among provinces on differences in provincial unemployment rates. The effect is found to be statistically significant, but small in magnitude.

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Manpower—A Prime Resource

The Annals of the American Academy of Political and Social Science ◽

10.1177/000271626334500117 ◽

1963 ◽

Vol 345 (1) ◽

pp. 122-129

Author(s):

Ernest W. Williams

Keyword(s):

Public Policy ◽

Labor Force ◽

Government Policy ◽

Work Force ◽

Extreme Pressure ◽

Business Growth ◽

Rational System ◽

Freight Rates ◽

Wage Rates ◽

Combined Impact

Labor is the largest single cost element in all forms of transport. The skilled work force is also a major asset which makes possible the conduct of a vital and complicated business. Growth of competition among transport technologies, the growth of private and unregulated transport, and the uneven impact of public policy have put regulated carriers of all types under severe pressure. With freight rates controlled by competition and with wage rates and prices rising, extreme pressure to economize on labor and to devote available funds to cost-reducing developments has persisted for many years. Carrier types, especially the railroads, which have felt the combined impact of adverse government policy and the sharpening of competition have reduced their work forces drastically. Peculiarly difficult problems face them and their workers. To the extent that some types of transport have been overstimulated by public policy while others have been held back, similar maladjustments in the size of the labor force committed to each have been brought about. Movement toward a more rational system will require painful adjustment which should not be ignored in adjusting governmental policy.

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