California Dreamin’ of Higher Wages
The economists’ preferred model shows that past minimum wage increases in California have caused a measurable decrease in employment among affected employees. Specifically, they find that a 10% increase in the minimum wage would cause a nearly five-percent reduction in employment in an industry where one-half of workers earn wages close to the minimum. In an industry with an average share of lower-wage workers, their findings imply that each 10% increase in California’s minimum wage has reduced employment for affected employees by two percent.
