Another study analyzing the effect of raising the minimum wage on employment levels is out, and it projects that raising the minimum wage to $15/hour by 2024 would reduce inequality and lift families out of poverty, and would not have any negative effect on jobs.
I have described why that’s what we should expect in a previous blog post and in a paper, Working Poverty: Low Skills or Low Wages? Wages at the low end are as low as they are because of the market (or “monopsony”) power these employers have, accounting for as much as half of their profits, and the money to fund the increase simply comes from those “supranormal” profits.
While previous studies have examined the minimum wage – employment connection and shown no job losses for small increases to the minimum, this most recent paper from the Institute for Research on Labor and Employment at Berkeley analyzes the effect of the doubling of the minimum to $15, and similarly finds no employment losses. For the millions of low-wage workers, this offers a fair and economically sound path out of poverty, and for all of us, a significant reduction in inequality.