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Caleb Taylor

STUDY: Minimum Wage Increases Harms Low-Skilled Workers

Updated: Apr 13


We’ve written previously about how the recently-passed minimum wage hike in Arkansas will limit opportunities for low-skilled workers. A new report from the National Bureau of Economic Research (NBER) backs up what we’ve been saying about the unintended consequences of minimum wage increases. From the report:

Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation.

One of the ironies of left-wingers pushing for minimum wage hikes is that these hikes inevitably lead to companies hiring less people for these positions or turning more entry-level work into unpaid internships, which the Left loathes. In an ideal world, left-wingers would want to make it easier for low-skilled workers to find employment and begin their careers. Alas, we don’t live in an ideal world and likely the Left will continue to sermonize about the need for more and more minimum wage hikes! For the Cato Institute’s take on the NBER report read here.

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