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Do economists find that higher minimum wages tend to reduce employment slightly?

Wednesday, October 14, 2020
By Christopher Hutton
YES

Studies show a higher minimum wage would lead to some job losses due to higher costs for employers. A 2016 meta-analysis examining 37 studies found minimum wage increases had very small but negative effects on employment.

A study by congressional economists estimates that a $15 federal minimum wage could lead to a loss of 1.3 million jobs, while increasing wages for 17 million workers and decreasing the number of people living below the poverty line.

In a 2017 Seattle study, researchers interviewed employees and employers about the impact of a local minimum-wage hike. They found that 35% of interviewed workers reported unpredictable work hours, and 17% lost their jobs at some point during the two-year period studied. Employers most often reported increasing prices or adding extra fees (rather than laying off employees) to cover increased wages.

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