scholarly journals The Pass-Through of Minimum Wages into US Retail Prices: Evidence from Supermarket Scanner Data

2020 ◽  
pp. 1-99
Author(s):  
Tobias Renkin ◽  
Claire Montialoux ◽  
Michael Siegenthaler
Keyword(s):  
Minimum Wage ◽  
State Level ◽  
Minimum Wages ◽  
Scanner Data ◽  
Consumer Prices ◽  
Retail Prices ◽  
Minimum Wage Legislation ◽  
Pass Through ◽  
Wage Increases ◽  
Grocery Products

This paper estimates the pass-through of minimum wage increases into the prices of US grocery and drug stores. We use high-frequency scanner data and leverage a large number of state-level increases in minimum wages between 2001 and 2012. We find that a 10% minimum wage hike translates into a 0.36% increase in the prices of grocery products. This magnitude is consistent with a full pass-through of cost increases into consumer prices. We show that price adjustments occur mostly in the three months following the passage of minimum wage legislation rather than after implementation, suggesting that pricing of groceries is forward-looking.

Do Minimum Wage Increases Affect SNAP Benefits?

2019 ◽  
Vol 19 (2) ◽  
Author(s):  
Thomas Snyder ◽  
Senayt Rinkevich ◽  
Weici Yuan
Keyword(s):  
Minimum Wage ◽  
Fixed Effects ◽  
State Level ◽  
Minimum Wages ◽  
Wage Increase ◽  
Minimum Wage Increase ◽  
Assistance Program ◽  
Data Set ◽  
Nutrition Assistance ◽  
Wage Increases

Abstract The recession of the late 2000s accompanied a steep increase in the number of people on the U.S. federal Supplemental Nutrition Assistance Program (SNAP). The economy recovered, yet the number of people on SNAP remained relatively high. This study investigates whether increases in minimum wages affected the number of SNAP beneficiaries and the per-capita cost of the program. Economic reasoning suggests a minimum wage increase can decrease poverty through higher wages or increase poverty by enacting a barrier to work. Using a panel data set (1997–2015) at the state level, two-way fixed effects estimates demonstrate a nonlinear relationship between minimum wages and SNAP benefits. At low minimum wages, increases in the minimum wage reduce SNAP enrollment and benefits; however, at high minimum wages, increases in the minimum wage increase SNAP enrollment and benefits. Twenty states have already passed the minimum wage turning point. Further increases can lead to more SNAP participants.

The effect of minimum wages on consumption in Canada

2020 ◽  
pp. 103530462094995
Author(s):  
Young Cheol Jung ◽  
Adian McFarlane ◽  
Anupam Das
Keyword(s):  
Minimum Wage ◽  
Adult Population ◽  
Retail Trade ◽  
Minimum Wages ◽  
The Real ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Lag Model ◽  
Wage Increases

We use Canadian data over the period of 1991Q1 to 2019Q2 to examine the effect of higher minimum wages on consumption, measured as the real retail trade sales per adult population. Such an examination is rare in the extant literature and it is timely given the increasing debate concerning the stimulus versus inflationary effects arising from wage polices because of COVID-19 global pandemic. We apply the autoregressive distributed lag model to determine the causal relationship between these variables. We find one long-run cointegrating relationship that runs from the real minimum wage to the real retail trade sales. In addition, we find that a 1% increase in the minimum wage is associated with almost a 0.5% increase in real retail trade sales in the long run. While our findings rest on several statistical assumptions, there is strong evidence in support of the position that minimum wage strengthens aggregate consumer spending, and thereby the standard of living, economic growth and stability. This is a position that differs from the conclusions drawn from mainstream academic and policy debates on the economic usefulness and efficacy of minimum wage increases. JEL Codes: C30, E21, E24

scholarly journals The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns

2019 ◽  
Vol 20 (3) ◽  
pp. 293-329 ◽  
Author(s):  
David Neumark
Keyword(s):  
United States ◽  
Minimum Wage ◽  
Past Research ◽  
The United States ◽  
Minimum Wages ◽  
Definitive Answer ◽  
Employment Effects ◽  
Conflicting Evidence ◽  
Known Unknowns ◽  
Wage Increases

Abstract I discuss the econometrics and the economics of past research on the effects of minimum wages on employment in the United States. My intent is to try to identify key questions raised in the recent literature, and some from the earlier literature, which I think hold the most promise for understanding the conflicting evidence and arriving at a more definitive answer about the employment effects of minimum wages. My secondary goal is to discuss how we can narrow the range of uncertainty about the likely effects of the large minimum wage increases becoming more prevalent in the United States. I discuss some insights from both theory and past evidence that may be informative about the effects of high minimum wages, and try to emphasize what research can be done now and in the near future to provide useful evidence to policymakers on the results of the coming high minimum wage experiment, whether in the United States or in other countries.

scholarly journals The Effect of Minimum Wages on Low-Wage Jobs*

2019 ◽  
Vol 134 (3) ◽  
pp. 1405-1454 ◽  
Author(s):  
Doruk Cengiz ◽  
Arindrajit Dube ◽  
Attila Lindner ◽  
Ben Zipperer
Keyword(s):  
Minimum Wage ◽  
State Level ◽  
The United States ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Employment Effect ◽  
Hourly Wage ◽  
Difference In Differences ◽  
Bottom Part ◽  
Demographic Groups

Abstract We estimate the effect of minimum wages on low-wage jobs using 138 prominent state-level minimum wage changes between 1979 and 2016 in the United States using a difference-in-differences approach. We first estimate the effect of the minimum wage increase on employment changes by wage bins throughout the hourly wage distribution. We then focus on the bottom part of the wage distribution and compare the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it to infer the employment effect. We find that the overall number of low-wage jobs remained essentially unchanged over the five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution. Our estimates by detailed demographic groups show that the lack of job loss is not explained by labor-labor substitution at the bottom of the wage distribution. We also find no evidence of disemployment when we consider higher levels of minimum wages. However, we do find some evidence of reduced employment in tradeable sectors. We also show how decomposing the overall employment effect by wage bins allows a transparent way of assessing the plausibility of estimates.

The Quest for Fairness in Australian Minimum Wages

2011 ◽  
Vol 53 (5) ◽  
pp. 662-680 ◽  
Author(s):  
Joshua Healy
Keyword(s):  
Minimum Wage ◽  
Real Wage ◽  
Industrial Relations ◽  
Minimum Wages ◽  
National System ◽  
Relative Wages ◽  
Rate Of Increase ◽  
Worthy Goal ◽  
Wage Increases ◽  
Over Time

The attainment of ‘fairness’ is widely regarded as a worthy goal of setting minimum wages, but opinions differ sharply over how to achieve it. This article examines how interpretations of fairness shaped the minimum wage decisions of the Australian Industrial Relations Commission between 1997 and 2005. It explores the Commission's approaches to three aspects of fairness in minimum wages: first, eligibility for increases; second, the form of increase; and third, the rate of increase over time. The Australian Industrial Relations Commission consistently gave minimum wage increases that were expressed in dollar values and applied to all federal awards. Its decisions delivered real wage increases for the lowest paid, but led to falls in real and relative wages for the majority of award-reliant workers. Fair Work Australia, the authority now responsible for setting minimum wages in the national system, appears apprehensive about parts of the Australian Industrial Relations Commission's legacy and has foreshadowed a different approach, particularly with respect to the form of adjustment.

scholarly journals Auf der Speisekarte der DPAG: Rechtliche oder ökonomische Marktzutrittsschranken?

2009 ◽  
Vol 60 (1) ◽  
Author(s):  
Thomas Wein
Keyword(s):  
Political Parties ◽  
Economic Analysis ◽  
Minimum Wage ◽  
Economies Of Scale ◽  
Labour Costs ◽  
Postal Services ◽  
Minimum Wage Legislation ◽  
Wage Increases ◽  
The Cost ◽  
Industrial Economic

SummaryThe liberalization of the German Markets for postal services which have been realized with the beginning of 2008 was politically combined with the introduction of minimum wage legislation. This minimum wage increases the labour costs of the competitors without reaching the cost level of the incumbent. The industrial economic analysis shows that the minimum wage is able to prevent market entries. But the minimum wage legislation is under attack by administrative courts and some political parties. Hence, it is possible that the minimum wage for postal services will be shortly abolished. An alternative to the minimum wage could be the using of existing economies of scale and scope by the incumbent to squeeze the competitors out of the market.

scholarly journals Minimum Wages and Retirement

ILR Review ◽  
2019 ◽  
Vol 73 (1) ◽  
pp. 153-177
Author(s):  
Mark Borgschulte ◽  
Heepyung Cho
Keyword(s):  
Social Security ◽  
Labor Supply ◽  
Minimum Wage ◽  
Older Workers ◽  
Employment Outcomes ◽  
Minimum Wages ◽  
Financial Resources ◽  
Positive Effects ◽  
Wage Increases ◽  
Social Security Beneficiaries

The authors study the effect of the minimum wage on the employment outcomes and Social Security claiming of older US workers from 1983 to 2016. The probability of work at or near the minimum wage increases substantially near retirement, and previous researchers and policies suggest that older workers may be particularly vulnerable to any disemployment effects of the minimum wage. Results show no evidence that the minimum wage causes earlier retirements. Instead, estimates suggest that higher minimum wages increase earnings and may have small positive effects on the labor supply of workers in the key ages of 62 to 70. Consistent with increased earnings and delayed retirement, higher minimum wages decrease the number of Social Security beneficiaries and amount of benefits disbursed. The minimum wage appears to increase financial resources for workers near retirement.

State Responses to Federal Inaction and Growing Inequality

2017 ◽  
Author(s):  
William W. Franko ◽  
Christopher Witko
Keyword(s):  
Federal Government ◽  
Minimum Wage ◽  
State Government ◽  
Public Awareness ◽  
Aggregate Data ◽  
The State ◽  
Minimum Wages ◽  
Political Factors ◽  
Wage Increases ◽  
State Responses

In this chapter the authors return to aggregate data to examine how the state minimum wage has responded to a growing awareness of inequality and other state political factors. The minimum wage was initially pursued by the states a number of years before the federal government adopted a minimum wage in the 1930s. However, the minimum wage law is still jointly controlled by the states and the federal government, allowing us to directly examine how federal inaction in raising the minimum wage spurs state minimum wage increases. The results show that federal inaction, a public awareness of growing inequality, and state government liberalism are significant predictors of increases in state minimum wages. The minimum wage is more likely to be increased in states with the initiative, even sometimes in states that are usually considered to be relatively conservative.

scholarly journals The debate on the economic effects of minimum wage legislation

2017 ◽  
Vol 6 (2) ◽  
pp. 171
Author(s):  
Santos Miguel Ruesga-Benito ◽  
Fernando Ignacio González-Laxe ◽  
Jose Picatoste
Keyword(s):  
Minimum Wage ◽  
Empirical Analysis ◽  
Economic Effects ◽  
Minimum Wages ◽  
Economic Indicators ◽  
Macroeconomic Variables ◽  
Labor Policies ◽  
Minimum Wage Legislation ◽  
Poverty Levels ◽  
Distribution Of Income

The minimum wage establishment has its origin in the first third of the last century. Since its creation has been a focus of continuing controversy and an unfinished debate on economics field. This work reviews the effects of the minimum wage on employment and other macroeconomic variables, from both theoretical and empirical perspectives. The method is based on the revision of the literature and the main economic indicators. The central contribution of this paper is providing a general reflection on theoretical and empirical analysis about the debate on minimum wage and its effects. The results showed that some labor policies are taking account the effects of austerity strategies, shifting the attention towards the implementation of minimum wages or their updating, in order to reduce the growing inequalities in the distribution of income, and even poverty levels.

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