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Misreading minimum wage research

Michael Strain writes at Bloomberg that advocates of a $15 minimum wage ought to take another look at the research literature.

Several Democratic presidential candidates explicitly support a $15 national minimum wage. A bill that would legislate this has more than 200 Democratic co-sponsors in the House of Representatives.

Economist Jeffrey Clemens argues, however, in a recent policy paper published by the Cato Institute, that a good deal of this support is predicated on an incomplete reading of the academic literature.

Clemens correctly acknowledges a recent string of important papers — including several co-authored by the economist Arindrajit Dube — that found little evidence that minimum-wage increases reduce employment. But he argues that many other important papers written in the past few years get short shrift by journalists, opinion leaders and policy makers.

Clemens suggests they should pay particular attention to new research with transparent methods, and highlights a 2018 paper by the economist John Horton that analyzes an online labor market in which workers are hired to do programming, data entry and graphic design. Horton randomly assigned minimum-wage restrictions to the hiring companies, and found that when the wage floor increased, the employers hired workers with more skills and the hours worked declined substantially. The policy implications are clear: A higher minimum wage can reduce employment opportunities for the least-skilled workers in the labor market.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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