The Long-run Effects Of The Minimum Wage

David Neumark, professor of economics at Michigan State University and Olena Nizalovaof have a NBER study on the long-run effects of the minimum wage. The abstract states:

We estimate the longer-run effects of minimum wages by using information on the minimum wage history that workers have faced since potentially entering the labor market. The evidence indicates that even as individuals reach their late 20’s, they work less and earn less the longer they were exposed to a higher minimum wage, especially as a teenager. The adverse longer-run effects of facing high minimum wages as a teenager are stronger for blacks. From a policy perspective, these longer-run effects of minimum wages are likely more significant than the contemporaneous effects of minimum wages on youths that are the focus of most research and policy debate.

In other words, the minimum wage harms especially blacks and those with the least amount of skills. While the minimum wage may have negligible effects on youths, it has a long lasting negative effect on blacks.

2 Responses to “The Long-run Effects Of The Minimum Wage”

  • How can one take seriously a broad statement over an entire race of people based on a single factor?

  • Blacks tend to be disproportionately affected by the minimum wage because of a number of things: on average a higher tendency to drop out of high school, higher degrees of poverty, racism, etc…Nobody is saying this only affects blacks, only that it primarily does, and even that, for a number of different reasons.

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