Higher Pay, Fewer Jobs
Across the nation, lawmakers continue to debate the merits of raising the minimum wage to $12 per hour and to $15 per hour. In this paper, we estimate the employment and wage earnings effects of raising the state minimum wage in New York to $12 and to $15 per hour. We find that any potential benefits from raising the minimum wage would be greatly offset by the negative labor market consequences of the policy. In particular, the wage earnings gains from raising the minimum wage would come at a significant cost to the large number of workers who would become jobless. In effect, raising the minimum wage transfers wage earnings from the low-wage workers who are unfortunate enough to become jobless to the low-wage workers who remain employed.