09/28/2022

The New Wave of Local Minimum Wage Policies: Evidence from Six Cities

This report advances the discussion of high local minimum wages by using both event study and synthetic control methods, and by expanding our analysis to the effects in six cities that were early movers: Chicago, District of Columbia, Oakland, San Francisco, San Jose and Seattle. At the end of 2016 (the last year in our analysis), citywide minimum wages exceeded $10 in all of these cities and had reached $13 in two—San Francisco and Seattle.

Similar to our first report, we focus here on the food services industry, a major employer of low wage workers. We extend our previous methods here, using both event study and synthetic control designs to assess the policies’ effects. We report estimates that pool our data from all six cities as well as estimates that use the data for each city separately. Our various approaches yield broadly similar results. A 10 percent increase in the minimum wage increases earnings between 1.3 and 2.5 percent, depending on the model estimated. Moreover, we do not detect significant negative employment effects. These findings are similar to those in a recent state-of-the-art study of minimum wages up to $10 (Cengiz et al. 2018).

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