Real and Permanent Minimum Wages

The disemployment of indexing minimum wages to inflation is over 2.5 times the magnitude of the disemployment effect associated with nominal minimum wage increases. We find considerable variance in the effect of minimum wage increases on employment across low- and high-wage counties. Employment in low-wage counties is considerably more sensitive to minimum wage increases than employment in high-wage counties. Less mobile counties have larger disemployment effects from minimum wage increases than higher mobility counties.

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