No, Raising the Local Minimum Wage Doesn’t Hurt Local Businesses
This variation has provided opportunities for something rare in empirical economics: quasi-experimental studies. In one famous paper, economists Alan Krueger and David Card compared fast-food employment in New Jersey, which raised its minimum wage in 1992, with that in Pennsylvania, which did not. “We find no indication that the rise in the minimum wage reduced employment,” they concluded.
Are sub-state localities different from states? Another important study gets at this question by looking at county-level data, comparing every contiguous county across state borders where minimum wages differed over the course of 16 years. Instead of “all sorts of problems,” the researchers found “no evidence of job losses for high impact sectors such as restaurants and retail.”
Case studies of cities with higher wage floors are less common, but those that have been done support the findings of the state and county research. Studies of San Francisco and Santa Fe, the two cities with the longest track records of higher minimums, reveal “no statistically significant negative effects on employment or hours (including in low-wage industries such as restaurants).”
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