Raising Minimum Wage Kills Jobs: UCI Study

Don't worry, old man, they don't raise the wages of the workers writing the shit either.
Don't worry, old man, they don't raise the wages of the workers writing the shit either.
Photo by flickr user Samuel Leighton

One more reason no one gets raises: Increasing the minimum wage causes long-term job losses, according to UCI Irvine research.

And a hearty bah humbug to ya'll!

David Neumark, UC Irvine Chancellor's Professor of Economics; J.M. Ian Salas, research fellow at the Harvard Center for Population & Development Studies (and a 2013 UCI Ph.D. graduate); and William Wascher, economist with the Board of Governors of the Federal Reserve System in Washington, D.C., had their study's findings published last week in the IZA Journal of Labor Policy. It's consistent with their previously published work summarized in the 2008 book Minimum Wages.

"There has been a continuing trickle of studies claiming that a higher minimum wage may not cause job loss, which have provided fodder to policymakers and others seeking increases," Neumark says in a UCI statement. "But our new evidence directly addresses this claim and shows that it is simply not true. Higher minimum wages do destroy jobs."

The findings take issue with the use of broad U.S. comparisons that measure employment changes in states with minimum wage increases versus those without, arguing that only adjacent states or counties should be used as comparisons. When the parameters were narrowed in this way to adjust for what would have happened had the minimum wage not gone up, researchers assert, there was no net decrease in employment.

"These studies raise a good question: What do you use as a comparison or proxy group for states where the minimum wage increased?" Neumark said. "It turns out that it doesn't matter."

Neumark advises separating "our feelings about low wages from the evidence on the effects of the government simply requiring employers to pay higher wages. ... The data and the evidence tell us that a higher minimum wage results in job loss for low-skilled workers. We may be willing to accept that job loss in return for other benefits of higher wages for some workers, but we can't pretend there will be no lost jobs."

The university publicized these findings the same day two hotel industry groups sued the city of Los Angeles in federal court to challenge the recent passage of a $15.37-per- hour minimum wage. Filed by the American Hotel & Lodging Association and the Asian American Hotel Owners Association, the suit contends the local wage hike ordinance oversteps federal laws governing the relationship between labor unions and employers. But a city spokesman expresses confidence "that the ordinance is lawful and valid.''

Upcoming Events

So instead of relying on modest bumps at minimum wage jobs to fill the ever-widening financial gap caused by always rising tuition, fees and student-loan debt, Anteaters should quit to protect their working poor comrades and do the next most logical thing: sell meth.

Email: mcoker@ocweekly.com. Twitter: @MatthewTCoker. Follow OC Weekly on Twitter @ocweekly or on Facebook!


Sponsor Content

Newsletters

All-access pass to the top stories, events and offers around town.

  • Top Stories
    Send:

Newsletters

All-access pass to top stories, events and offers around town.

Sign Up >

No Thanks!

Remind Me Later >