Making Sense of the Minimum Wage: A Roadmap for Navigating Recent Research

Abstract

The new conventional wisdom holds that a large increase in the minimum wage would be desirable policy. Advocates for this policy dismiss the traditional concern that such an increase would lower employment for many of the low-skilled workers that the increase is intended to help. Recent economic research, they claim, demonstrates that the disemployment effects of increasing minimum wages are small or nonexistent, while there are large social benefits to raising the wage floor. This policy analysis discusses four ways in which the case for large minimum wage increases is either mistaken or overstated