New Study Reveals Minimum Wage Hikes Lead to Job Loss for Minorities and High School Drop-Outs
Publication Date: January 2007
Topics: Minimum Wage
Washington, DC – A study released today by the Employment Policies Institute (EPI) reveals the increasing job losses that plague minorities and high school drop-outs following minimum wage hikes.
The research, conducted by Dr. David Neumark, economist at the University of California, Irvine, looks at the effects minimum wage hikes have had since the welfare reforms of the 1990s. The author focused specifically on the impact of minimum wage hikes on employment levels, wages, and income for teens and young adults.
The author found that for every 10% increase in the minimum wage:
• Minority unemployment increased by 3.9%
• Hispanic unemployment increased by 4.9%
• Minority teen unemployment increased 6.6%
• African American teen unemployment increased by 8.4%
• Low-skilled unemployment (i.e., those lacking a high school diploma) increased by 8%
“Neumark’s research builds on 60 years of research showing the harsh unintended consequences of minimum wage hikes,” said Jill Jenkins, EPI’s Chief Economist. “Instead of raising the federal minimum wage, a stand alone increase in the EITC would more effectively help low-income families without putting people out of work.”
To read “Minimum Wage Effects in the Post-welfare Reform Era” by Dr. David Neumark, go to www.EPIonline.org/studies
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding entry-level employment. For more information or to schedule an interview, please contact Alison at 202/463-7650.