scholarly journals City Limits: What Do Local-Area Minimum Wages Do?

2021 ◽  
Vol 35 (1) ◽  
pp. 27-50
Author(s):  
Arindrajit Dube ◽  
Attila Lindner
Keyword(s):  
Minimum Wage ◽  
Local Variation ◽  
Local Area ◽  
Minimum Wages ◽  
Level Variation ◽  
Early Evidence ◽  
Trade Offs ◽  
Federal Standard ◽  
The Impact ◽  
New Evidence

Cities are increasingly setting their own minimum wages, and this trend has accelerated sharply in recent years. While in 2010 there were only three cities with their own minimum wages exceeding the state or federal standard, by 2020 there were 42. This new phenomenon raises the question: is it desirable to have city-level variation in minimum wage polices? We discuss the main trade-offs emerging from local variation in minimum wage polices and evaluate their empirical relevance. First, we document what type of cities raise minimum wages, and we discuss how these characteristics can potentially impact the effectiveness of city-level minimum wage policies. Second, we summarize the evolving evidence on city-level minimum wage changes and provide some new evidence of our own. Early evidence suggests that the impact of the policy on wages and employment to date has been broadly similar to the evidence on state- and federal-level minimum wage changes. Overall, city-level minimum wages seem to be able to tailor the policy to the local economic environment without imposing substantial distortions in allocation of labor and businesses across locations.

Employer Responses to a City-Level Minimum Wage Mandate: Early Evidence from Seattle

2018 ◽  
Vol 56 (2) ◽  
pp. 451-479 ◽  
Author(s):  
Jennifer L. Romich ◽  
Scott W. Allard ◽  
Emmi E. Obara ◽  
Anne K. Althauser ◽  
James H. Buszkiewicz
Keyword(s):  
Labor Market ◽  
Minimum Wage ◽  
Policy Makers ◽  
Ownership Structures ◽  
Early Evidence ◽  
Trade Offs ◽  
Wage Regulation ◽  
Accommodation Sector ◽  
The Impact ◽  
Insight Into

A growing number of cities and counties have recently raised their minimum wages. How employers respond to these mandates provides insight into the impact such policies might have on workers and local labor market. Drawing on two survey waves tracking initial responses to Seattle’s $15 Minimum Wage Ordinance by 439 employers with low-wage workers, we show how employers adjusted to higher wages. Most commonly, firms raised prices (56% reported this); smaller percentages reduced employee headcount or hours, limited internal wage progression, or took other measures. Single-site Seattle employers responded similarly to those with multiple sites. Food and accommodation sector employers were more likely to raise prices than firms in other sectors. Relative to other ownership structures, franchises disproportionately reported reducing their workforces. Very few employers reported withdrawing from Seattle. Overall, initial employer responses to this city-level minimum wage law align with predictions from the literature, findings that highlight trade-offs that policy makers must consider in future local wage regulation.

scholarly journals The Impact of GRDP and RWP on Regional Minimum Wage

JEJAK ◽  
2020 ◽  
Vol 13 (2) ◽  
pp. 292-306
Author(s):  
Robert Tua Siregar ◽  
Hery Pandapotan Silitonga ◽  
Khairunnisah Lubis ◽  
Acai Sudirman
Keyword(s):  
Linear Regression ◽  
Multiple Linear Regression ◽  
Correlation Coefficient ◽  
Minimum Wage ◽  
Linear Regression Analysis ◽  
T Test ◽  
Minimum Wages ◽  
Market Demand ◽  
F Test ◽  
The Impact

The purpose of this research was to find out the effect of the percentage in development of Pematangsiantar city’s regional minimum wages, and the problem in this study how GRDP and RWP affect on the percentage of development of Regionl Minimum Wage at Pematangsiantar City. The method used was quantitative descriptive analysis. Data analysis used were Classic Assumption Test, Multiple Linear Regression, Correlation Coefficient, Determination, F-test and t-test object on RMW at Pematangsiantar city. Finding of research and results of the study can be summarized as follows: 1). The results of the multiple linear regression analysis test are  that the GRDP and RWP had a positive effect on the RMW of Pematangsiantar City, 2). The results of the correlation coefficient indicate that the GRDP and RWP of Pematangsiantar City on its RMW were at a very strong level, while the coefficient of determination of 67.5%  at high or low of the minimum wages can be explained by the GRDP and RWP, while the remaining  of 32.5% was influenced by other factors which were not included in this study, 3). Hypothesis Test for  F-test indicates that the GRDP and RWP influences significantly on Pematang city’s RMW, and for the t- test indicates that the GRDP and RWP had a positive and significant effect on the RMW in Pematangsiantar City from 2005 to 2018. This means that as the GRDP increases, the value of setting Pematangsiantar City's minimum wage in the following year will also increase, and vice versa. The increase of  laborers/workers demands will affect the standard of regioanalwages that will be determined, this happens  because wages will always adjust to the labor market demand. The stipulation of the minimum wage, it has an impact on GRDP in Pematangsiantar City, because the consumptive rate will be carried out in the place where it gets paid.

scholarly journals The Analysis of the Impact of GDP, FDI, Minimum Wage on Employment in Indonesia

2019 ◽  
Vol 2 (2) ◽  
pp. 53-62
Author(s):  
Thomson Sitompul ◽  
Yansen Simangunsong
Keyword(s):  
Minimum Wage ◽  
Direct Investment ◽  
Regression Models ◽  
Time Series Data ◽  
Minimum Wages ◽  
Series Data ◽  
Economic Sector ◽  
Linear Regression Models ◽  
The Impact ◽  
Multiple Linear Regression Models

Unlike the previous study in determinant of labor absorption, which focused on economic sector and took up regional scope, this paper examines the impact of Gross Domestic Product, Foreign Direct Investment and Minimum Wages on labor absorption in Indonesia which take the national scope and aggregate labor by using secondary series of time series data (1990-2015). This study contributes to the limited literature on aggregate employment and national scope as the impact of the minimum wage, GDP, FDI in developing countries, especially in Indonesia. By using multiple linear regression models, surprisingly, we find that GDP and Minimum Wages have a positive and significant impact to increase employment while FDI  does not affect employment in Indonesia.

Minimum Wages and Supporting Wage Growth

2018 ◽  
Author(s):  
Brian Nolan
Keyword(s):  
Minimum Wage ◽  
Real Wage ◽  
Wage Growth ◽  
Minimum Wages ◽  
Central Question ◽  
The Uk ◽  
Household Incomes ◽  
Rich Countries ◽  
The Impact ◽  
Over Time

This chapter addresses the central question of how governments can seek to underpin real wage growth for working households over time. It looks first at the role that minimum wages can play in supporting wages and household incomes in the middle as well as lower parts of the distribution. This is investigated through a simulation exercise looking at the impact of a substantial increase in the minimum wage in the UK, bringing out the broader lessons to be learned for rich countries. A variety of other routes through which policy might seek to support wage growth are then set out and discussed.

Book Reviews

2013 ◽  
Vol 51 (2) ◽  
pp. 558-560
Keyword(s):  
Labor Market ◽  
Minimum Wage ◽  
Job Search ◽  
Labor Market Outcomes ◽  
Minimum Wages ◽  
New York University ◽  
Market Outcomes ◽  
Welfare Impacts ◽  
Wage Effects ◽  
The Impact

Etienne Wasmer of Sciences Po and LIEPP reviews, “The Minimum Wage and Labor Market Outcomes” by Christopher J. Flinn. The Econlit abstract of this book begins: “Presents a model based on search and bargaining to use in investigating the impact of a minimum wage on labor market outcomes. Discusses descriptive evidence on minimum wage effects; a model of minimum wage effects on labor market careers; labor market and welfare impacts of minimum wages; minimum wage effects on labor market outcomes—a selective survey; assessing the welfare impacts of actual changes in the minimum wage; econometric issues; model estimates and tests; optimal minimum wages; the on-the-job search; and heterogeneity. Flinn is Professor of Economics at New York University and Senior Research Fellow at Collegio Carlo Alberto.”

scholarly journals The Effects of Minimum Wages on Wage Dispersion and Employment: Evidence from the U.K. Wages Councils

ILR Review ◽  
1994 ◽  
Vol 47 (2) ◽  
pp. 319-329 ◽  
Author(s):  
Stephen Machin ◽  
Alan Manning
Keyword(s):  
United Kingdom ◽  
Minimum Wage ◽  
Minimum Wages ◽  
Average Wage ◽  
Wage Dispersion ◽  
The United Kingdom ◽  
Dramatic Decline ◽  
Using Data ◽  
The Impact ◽  
Positive Effect

Using data on Wages Council coverage from the United Kingdom New Earnings Survey, the authors examine the impact of mandated minimum wages on wage dispersion and employment in the United Kingdom in the 1980s. They find evidence that a dramatic decline in the toughness of the regulation imposed by the Wages Councils through the 1980s—a decline, that is, in the level of the minimum wage relative to the average wage—significantly contributed to widening wage dispersion over those years. There is, however, no evidence of an increase in employment resulting from the weakening bite of the Wages Council minimum pay rates. Instead, consistent with the conclusions of several recent U.S. studies, the findings suggest that the minimum wage had either no effect or a positive effect on employment.

scholarly journals How Is The Effect Of Labour Absorption, Poverty And Education Level On The Implementation Of Regional Minimum Wage? A case in Riau Province, Indonesia

2019 ◽  
Author(s):  
Abdiyanto
Keyword(s):  
Minimum Wage ◽  
Education Level ◽  
Minimum Wages ◽  
Independent Variables ◽  
The Impact ◽  
Labour Absorption

The present study aims to analyze the impact of labour absorption, poverty and education on regional minimum wage implementation in Riau Province. The research is analyzed to find out which variables are most dominant to the minimum wage. The results of the calculation and analysis of dependent and independent variables indicate that the variable of labour absorption, poverty and education level has an effect of 56.87%. The result of labour absorption interpretation is negative value -0,334. Other variables were positive values such as poverty of 0.44 and education level of 0.105% on the implementation of regional minimum wages in Riau Province from 2007-2017.

scholarly journals Do Lower Minimum Wages for Young Workers Raise Their Employment? Evidence from a Danish Discontinuity

2020 ◽  
Vol 102 (2) ◽  
pp. 339-354 ◽  
Author(s):  
Claus Thustrup Kreiner ◽  
Daniel Reck ◽  
Peer Ebbesen Skov
Keyword(s):  
Minimum Wage ◽  
Minimum Wages ◽  
Youth Employment ◽  
Hourly Wage ◽  
Young Workers ◽  
Policy Changes ◽  
Danish Population ◽  
Total Input ◽  
Wage Payment ◽  
The Impact

We estimate the impact of youth minimum wages on youth employment by exploiting a large discontinuity in Danish minimum wage rules at age 18, using monthly payroll records for the Danish population. The hourly wage jumps by 40% at the discontinuity. Employment falls by 33%, and total input of hours decreases by 45%, leaving the aggregate wage payment almost unchanged. We show theoretically how the discontinuity may be exploited to evaluate policy changes. The relevant elasticity for evaluating the effect on youth employment of changes in their minimum wage is in the range 0.6 to 1.1.

scholarly journals The Effect of Provincial Minimum Wage on Wage Inequality in Java

2019 ◽  
pp. 352-357
Author(s):  
Daniel Bastian Lubis ◽  
Syamsul Hidayat Pasaribu ◽  
Muhammad Findi
Keyword(s):  
Income Inequality ◽  
Labor Force ◽  
Minimum Wage ◽  
Wage Inequality ◽  
Wage Gap ◽  
Negative Impact ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Wage Setting ◽  
The Impact

The minimum wage setting policy as an effort to improve wage distribution and expected to reduce income inequality is still being a debate in the literatures. However, similar studies, especially those that examine the impact of establishing minimum wages on the conditions of wages for workers in different percentile groups, have not been widely practiced in Indonesia. This study aims to analyze the increase in effective minimum wages against the wage gap of workers in the period 2008-2017 in Java using the National Labor Force Survey (Sakernas) data. Through the OLS method, we find that the impact of minimum wages is not the same among percentile groups. The effective minimum wage has a negative impact on the wage 30th percentile group where an increase in effective wage will reduces the gap between the 30th percentile and the 50th percentile. We find different result on 60th percentile. On this percentile, the effective minimum wage will increases the gap between the 60th percentile and the 50th percentile, this result implies a spillover.

scholarly journals Puerto Rico's minimum wage: Revisiting a price floor with bite

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Robert Tucker Omberg
Keyword(s):  
Puerto Rico ◽  
Minimum Wage ◽  
Control Method ◽  
Minimum Wages ◽  
Synthetic Control ◽  
Wage Elasticity ◽  
Federal Minimum Wage ◽  
Population Ratio ◽  
The Impact ◽  
Price Floor

Abstract Revisiting research from the 1990s from Castillo-Freeman and Krueger, I use the synthetic control method of Abadie et al. to estimate the impact of the most recent increase in the federal minimum wage on employment in Puerto Rico. I estimate that the employment/population ratio of various groups in Puerto Rico was significantly lower than that of a data-constructed synthetic Puerto Rico which did not raise its minimum wage. Placebo tests on other donor units, time periods, and population groups suggest that a significant portion of this gap is a result of the minimum wage. Groups with greater exposure to the minimum wage, such as teens and restaurant workers, experienced proportionally greater declines in employment. My results suggest an own-wage elasticity of employment in Puerto Rico of −0.68, higher than estimates from the mainland, which suggests that the employment response to minimum wages may be more dramatic at higher relative minimum wages.

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