2023/01/01 by Francine D. Blau, Isaac Cohen, Matthew Comey +2
Social Sciences · Economics, Econometrics and Finance · #Income, Poverty, and Inequality #Labor market dynamics and wage inequality
paper · doi:10.1177/00197939261464977
Using 1979–2019 Current Population Survey data, the authors study the effect of state and federal minimum wage policies on gender, race, and ethnic inequality. They find that minimum wages substantially reduce intergroup wage inequality at least up to the 20th wage percentile, with no evidence of adverse employment effects. The authors conduct counterfactual simulations of between-group inequality due to minimum wage changes since 1979. Declines in the real minimum wage in the 1980s slowed progress in narrowing between-group inequality. Relatively small changes in minimum wages during 1989–1998 and 1998–2007 meant little role for the minimum wage over those time spans. Since 2007, several states have steeply raised their minimum wages, especially raising Hispanics’ relative wages, because they earn low wages and reside disproportionately in those states. Finally, findings show that raising the federal minimum wage to roughly 14.50/hour in 2025 dollars would reduce existing between-group wage gaps below the 15th percentile by 25–50%.