Wednesday, July 4, 2018

[NJFAC] Increased Minimum Wage’s Positive Effects Grow

Report: Increased Minimum Wage's Positive Effects "Persist and Indeed Grow in Magnitude over Several Years" Paul Constant, 4/18  Here's the best news about the minimum wage that nobody is reporting.

Last month, Kevin Rinz and John Voorheis from the U.S. Census Bureau published an astounding new working paper on the minimum wage. (It's titled "The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data," and you can read it in full in PDF form here.) The study examines decades' worth of unique data, and it comes to some pretty thrilling conclusions. You'd think that a study about the minimum wage coming from Census employees in the Trump era would be worth a juicy headline or two, don't you?

Not one single news outlet that I can find picked up on this report. Seriously. Go check Google News for yourself, and let me know if I'm wrong. Granted, Rinz and Voorheis are economists and the language they use in the report is highly technical, but technical language has never stopped a news outlet from reporting on a negative study. In fact, the only difference I see between this study and some of the other minimum-wage studies that have been heavily covered in the media over the last few years is that the results are overwhelmingly favorable.
So how is the Census report different? They take information from the Social Security Administration and cross-reference it with Census data in order to track how the effects of the wage "persist over time."This allows the Census report to follow how individuals were affected by the wage increase. The majority of studies, even the most positive examples, are unable to prove that the higher minimum wage benefits the people it's intended to help. Critics will often argue that a higher minimum wage pushes the most undereducated or under-skilled employees out of the labor market entirely, rendering them unemployable. This study puts that thesis to the test.
After running the data, Rinz and Voorheis find it reasonable to argue that "a minimum wage increase comparable in magnitude to the increase experienced in Seattle between 2013 and 2016 would have blunted some, but not nearly all of the worst income losses suffered at the bottom of the income distribution during the Great Recession."

Further, their findings suggest that "raising the minimum wage increases earnings growth at the bottom of the distribution, and those effects persist and indeed grow in magnitude over several years." So raising the minimum wage increases the wages of the poorest Americans, and an increased minimum wage has positive effects that grow over time.

June Zaccone
National Jobs for All Coalition

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