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Do Minimum Wages Have a Negative Impact on Employment in the United States?

Stephen Bazen

Abstracts

The study by David Card and Alan Krueger of the effect of a rise minimum wage in New Jersey fast-food restaurants (and their subsequent book) had marked impact on the economics profession. They found that the increase in the minimum wage actually increased employment. However, the 'new economics of the minimum wage' is based on a wider body of evidence than the New Jersey study. In their book, Card and Krueger re-examine earlier studies and present evidence supporting the claim that during the 1980s and early 1990s, minimum wage hikes had no significant negative employment effects in the United States. There have been a number of attempts to examine the robustness of their results and this research has been centred on the following three issues: (a) the validity of the New Jersey study, (b) the apparent absence of effects of federal minimum wage hikes using time series data and (c) the analysis of state and federal minimum wage increases on state employment levels. Based on this evidence it would appear that during the 1980s and 1990s that federal minimum wage increases did have a negative impact on teenage employment while state level increases, such as the one in New Jersey, by and large did not. This suggests that their results do not generalise to the point where it is possible to conclude that there is no negative effect of minimum wages on employment in the United States.

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References

Electronic reference

Stephen Bazen, “Do Minimum Wages Have a Negative Impact on Employment in the United States?”Économie publique/Public economics [Online], 17 | 2005/2, Online since 11 May 2007, connection on 15 May 2025. URL: http://journals.openedition.org/economiepublique/2263; DOI: https://doi.org/10.4000/economiepublique.2263

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About the author

Stephen Bazen

Irege, Université de Savoie

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Copyright

The text and other elements (illustrations, imported files) are “All rights reserved”, unless otherwise stated.

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