MINIMUM WAGE POLICY EMPLOYMENT EFFECTS AND POLICY IMPLICATIONS 1

Minimum Wage Policy:

The Employment Effect Debate and other Policy Considerations

Author Note:

This document was prepared on April 29, 2014.

MINIMUM WAGE POLICY EMPLOYMENT EFFECTS AND POLICY IMPLICATIONS 2

Abstract

While the wage-setting ability of the minimum wage is an established fact, its impacts on

employment have been fiercely debated – but have ultimately settled on being relatively

negligible. Living wages, already implemented in a slew of cities nationwide, provide a working

example for minimum wage laws. Understanding the reasons for success or failure of living

wage campaigns, being as they are a less stringent form of the minimum wage, is key for

advancing minimum wage legislation. While the debate on minimum wages has long had policy

implications, the academic disagreement continues unimpeded. After careful analysis of dozens

of studies and several large metastudies, there is not sufficient evidence to support a statistically

significant employment response to increases in the minimum wage. In addition, uncovering the

methodologies underlying some studies point to incorrect assumptions or better analysis

techniques that, when used, largely reverse previously significant results. Several different

reasons could account for the lack of an established effect, offsetting the cost borne by employers

after a minimum wage increase. Of particular note when considering minimum wage laws are

the different impacts of the minimum wage on different worker age groups, especially teenagers,

which may be obfuscated when considered as part of the entire employment response.

The potential drawbacks of the minimum wages, especially for teenager, lend credence to the

treatment of the minimum wage as merely one of several different policy avenues to induce

wealth redistribution.
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Introduction

The real dollar value of the minimum wage has steadily eroded since the 1980s, and wage

inequality has only grown with it. There exist long term trends in the labor market affecting the

distribution of wages; which have only been exacerbated due to the Great Recession. J. T.

Addison, M. L. Blackburn, and C. D. Cotti (2013) determined the recent minimum wage increase

during the Great Recession to only be slightly higher that the historical average, and lower than

the average during the period from 1950 to 1985 (pg. 31). D. Autor (2011) found the Great

Recession to only exacerbate existing long term wage inequality trends, particularly in that

“since the late 1970s and early 1980s, the rise in U.S. education levels has not kept up with the

rising demand for skilled workers, and the slowdown in education attainment has been

particularly severe for males. The result has been a sharp rise in the inequality of wages,” (pg.

12).

In the realm of public policy, the debate on the economic effects of the minimum wage in

terms of employment levels of the affected groups continues unabated, even as it irrefutably

raises the average wage of low wage workers. Studies conducted throughout the 2000s and

2010s have in general found a statistically insignificant employment effect of the minimum wage.

Traditionally, the consensus of the employment effect of the minimum wage was relatively well-

defined, and the assumptions being made in the process of conducting studies was not seriously

questioned. Now, the academic consensus has been turned on its head.

This has far-reaching consequences for legislative proposals going forward concerning

the expansion or curtailment of the minimum wage. While only a small percentage of the

workforce actually earns the minimum wage, it is nevertheless a benchmark for the setting of

wage structures in the service sector, the industry it is most associated with – retail clerks, fast
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food, and so on. Additionally, minimum wage has traditionally been one of the most visible and

pervasive policy tools the federal government has for wealth redistribution (the others being

taxes and welfare). During this time the federal government only increased the minimum wage

sporadically, and while some states forged ahead with their own minimum wages (higher than

the federal level), many others did not.

Fig 1. Wage and Hour Division (WHD), Minimum Wage Laws in the States - January 1, 2014.

Retrieved April 28th, 2014. United States Department of Labor.

At the same time, scores of municipalities have passed living wage laws, which are in

effect localized minimum wage laws. Living wage laws share the downward rigid (mandatory

minimum) structure of wages with the minimum wage, but they only apply to public sector

workers, and in some cases to businesses receiving public assistance or contractors, while the

minimum wage applies to all wage workers. However, living wages share advocacy support with
MINIMUM WAGE POLICY EMPLOYMENT EFFECTS AND POLICY IMPLICATIONS 5

minimum wage campaigns, and understanding how they are enacted lends valuable insight into

minimum wage implementation.

Main Claim

While the wage-setting ability of the minimum wage is an established fact, its impacts on

employment have been fiercely debated – but have ultimately settled on being relatively

negligible. Living wages, already implemented in a slew of cities nationwide, provide a working

example for minimum wage laws. Understanding the cost and benefits of the minimum wage are

essential for any legislative proposal.

Opposing viewpoints, contrary to popular belief…

While the debate on minimum wages has long had policy implications, the academic

disagreement is surprisingly large as well. Since the early 1980s up through the early 1990s, the

conclusions of the Minimum Wage Study Commission (MWSC), that of a minor but statistically

significant employment effect, remained largely dominant. Since an influential 1994 cross-state

border study that contradicted this conclusion, the debate has bifurcated into supporters of a

negligible employment effect, and those supporting the more traditional assertion of a

statistically significant negative employment effect.

Specifically, D. Card and A. Krueger (1994) found that “Contrary to the central

prediction of the textbook model of the minimum wage, but consistent with a number of recent

studies based on cross-sectional time-series comparisons of affected and unaffected markets or

employers, we find no evidence that the rise in New Jersey’s minimum wage reduced

employment at fast-food restaurants in the state,” (p. 791). This conclusion set the ground for a
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wide variety of interpretations of the available data that continued into the present. Additionally,

Card and Krueger questioned the conventional competitive model, saying that “Our empirical

findings on the effects of the New Jersey minimum wage are inconsistent with the predictions of

a conventional competitive model of the fast-food industry,” (p. 790). Put altogether, their

landmark paper seriously questioned the assumptions that other researchers had made in

conducting studies, which unsurprisingly drew some criticism.

J. Schmitt (2013) summarized the current debate as being bifurcated, noting that “At the

turn of the century, the minimum wage debate had two poles: on the one side, researchers

broadly identified with the ‘new minimum wage research’; and critics of the minimum wage and

the new minimum wage research, the most prolific of whom have been Neumark and Wascher,”

(p. 4). According to Schmitt, the ‘New Minimum Wage’ research was also innovative for

reasons other than its eventual conclusion. It also “Emphasized research methods based on

important differences in the “bite” of the federal minimum wage across the states. Any given

increase in the federal minimum, the thinking went, should have more impact in low-wage states,

where many workers would be eligible for an increase, than it would in high-wage states, where

a smaller share of the workforce would be affected,” (pg. 3).

According to J. Schmitt (2013), the Minimum Wage Study Commission found “Any

‘disemployment’ effects of the minimum wage were small and almost exclusively limited to

teenagers and possibly other younger workers” (p. 2). This conclusion was the dominant one for

about a decade from the early 1980s to the early 1990s, when the ‘New Minimum Wage

Research’ emerged.

The ‘New Minimum Wage’ research signaled a break from the more traditional MWSC,

but it was not overturned completely as it was quick to draw criticism. In contrast to the New
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Minimum Wage research, D. Neumark and W. Wascher (2006) found that “Literature—when

read broadly and critically—as largely solidifying the conventional view that minimum wages

reduce employment among low-skilled workers, and as suggesting that the low-wage labor

market can be reasonably approximated by the neoclassical competitive model” (p. 123). They

were among those opposed to the New Minimum Wage Research, and who supported the

traditional consensus of a tangible employment response to the minimum wage.

At the same time, a host of supporting studies found a statistically negligible employment

effect and suggested that the labor market could not be modeled by neoclassical competition. P.

Wolfson and D. Belman (forthcoming) concluded that “In the U.S, the employment elasticity for

youth appears to be between about -0.035 and -0.065. For the Food and Drink sector, the range is

broader, between -0.012 and -0.068, with more weight toward the zero end of the range than the

other. If one were to summarize these results in a single sentence we would be conclude that

there is a negative and generally statistically significant employment effect which is between

small and vanishingly small” (p. 21, emphasis mine). This would place them as being somewhat

between the conclusions of the New Minimum Wage research and the MWSC supported by

Neumark and Wascher.

In response, D. Neumark and W. Wascher (2006) argued that in contrast to Card and

Kreuger’s (1994) paper, their results “Generally supported the earlier consensus that increases in

the minimum wage reduce employment among youths. In particular, employment elasticities

with respect to the minimum wage ranged from about −.1 to −.2 for teenagers and from −.15 to

−.2 for the youth population as a whole,” (pg. 9). This is a rather significant employment

response when taking into account the generally inconclusive (statistically insignificant)

conclusions of other studies. Other researchers continued to support the traditional assumptions
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made in employment response studies. Burkhauser et al. (2000) posited that “It is not yet

necessary to abandon neoclassical theory as a method of predicting labor market outcomes.” (p.

676).

On the other end of the spectrum, H. Doucouliagos and T. D. Stanley (2009) both

questioned the prevailing conclusion of a negative minimum wage employment effect, as well as

offering some explanation. “First, minimum wages may simply have no effect on employment. If

this interpretation were true, it implies that the conventional neoclassical labor model is not an

adequate characterization of the US labor markets. Second, minimum-wage effects might exist,

but they may be too difficult to detect and/or are very small,” (p. 423). In putting forth these two

statements, Doucouliagos and Stanley were questioning not only the overarching conclusion of

employment effect of the minimum wage, but the underlying assumption, that of the neoclassical

labor model, as well. Doucouliagos and Stanley ended their critique by noting that “In any case,

with 64 studies containing approximately 1,500 estimates, we have reason to believe that if there

is some adverse employment effect from minimum-wage raises, it must be of a small and policy-

irrelevant magnitude,” (p. 423). This is only a further blow to the contention that the minimum

wage has a statistically significant disemployment effect, much less a public policy relevant one,

being that public policy is grounded in demonstrable real-world effects.

However, an important point that J. Schmitt (2013) made was that the results of a single

case study, as in D. Card and A. Krueger’s (1994) study, could not be generalized and that

random errors could’ve skewed the observations either way from the true effects – and that it

was impossible to rule out those possibilities (p. 7). This was due to the fact that despite the

innovative methods used in the study, it was still limited to a relatively small geographical area.
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Consequently, more recent studies such as those by A. Dube, T. W. Lester, and M. Reich,

(2010) generalized D. Card and A. Kruger’s (1994) study nationwide and largely confirmed the

findings to be broadly applicable:

For cross-state contiguous counties, we find strong earnings effects and no

employment effects of the minimum wage increases. By generalizing the local

case studies, we show that the difference in the estimated elasticities in the two

sets of studies result from insufficient controls for unobserved heterogeneity in

employment growth in the national-level studies…The large negative elasticities

in the traditional specification are generated primarily by regional and local

differences in employment trends that are unrelated to minimum wage policies. (p.

961-962).

Importantly, Dube et al. conclude by supporting D. Card and A. Krueger, and applied

their own findings to other minimum wage literature, which had ‘sometimes conflicting results’.

“For the range of minimum wage increases over the past several decades, methodologies using

local comparisons provide more reliable estimates by controlling for heterogeneity in

employment growth. These estimates suggest no detectable employment losses from the kind of

minimum wage increases we have seen in the United States (p. 962). By using the more

innovative methodologies pioneered by D. Card and A. Krueger a decade and half prior, Dube et

al. found the traditional conclusions reached in previous studies to be largely reversed.

The debate over the employment effect, however, as not simply focused on a dichotomy

between the New Minimum Wage Research and its opponents. J. T. Addison, M. L. Blackburn,

and C. D. Cotti, (2009) examined employment responses to wage increases in low-wage retail

environments and found that “Increasing the minimum wage tends to reduce employment levels
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in the sectors we examine, and in many cases we find evidence pointing to increased

employment from increasing the minimum wage,” (pg. 407). While this was a rather rare

conclusion, given the already wide-ranging range of employment responses and elasticities

already present in the literature, it was not altogether unfathomed.

Interestingly, H. Doucouliagos and T. D. Stanley (2009) found a trend of publication bias

in the corpus of literature surrounding the minimum wage debate. “In the minimum wage

literature, the magnitude of the publication selection bias is as large or larger, on average, than

the underlying reported estimate. Overall, correcting for publication bias would transform a

modestly negative average elasticity to a small positive employment elasticity”. (p. 423).

Clearly, both the individual studies themselves and the metastudies aggregating the

studies are spread wide across a range of possible conclusions, with no definite consensus among

the studies (though the authors of individual studies or meta-studies often claim to find it). There

is no clear agreement on a disemployment effect of minimum wage hikes, much less a

statistically significant one. Thus, the question of whether or not to implement the minimum

wage cannot be evaluated on the basis of its overall employment effect, as a policy decision

cannot be made on an unresolved academic question (one which legislators cannot adequately

answer). Nevertheless, the potential benefits and detriments of the minimum wage could

potentially be examined from another facet, one which shares some similarities with the

minimum wage.

Living wages: A helpful example

Living wages are similar to minimum wages in that they mandate a mandatory wage floor

for workers based on the cost-of-living index. Unlike minimum wages, however, there is no

national living wage, but rather a minimum wage, which applies to all wage workers in the labor
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market, compared to living wages which affects only public-sector workers within a certain city

that has passed living wage laws. Despite some differences, they serve as smaller test cases for

understanding a possible minimum wage effect. Understanding the reasons for the success or

failure of living wage campaigns, being as they are a less stringent form of the minimum wage,

is key for advancing minimum wage legislation. The similarity of the minimum wage and the

living wage implies that their respective campaigns would succeed in similar areas.

Concerning the implementation of living wages, H. Swarts and I. B. Vasi (2011) found

several important conclusions about the nature of the cities that produced successful living wage

campaigns. Their findings confirmed ones from earlier studies that “living wage policies are

better explained by political factors than economic grievances and that a federalist system

enables policy diffusion among various levels of the polity, including states, counties, and cities,”

(pg. 763). In light of this, it is not surprising that socioeconomically representative groups or

factors such as “neither [the] presence of a local ACORN chapter, labor union density, or both

together are significant predictors,” (pg. 763). Other factors included the city size, with a larger

city being more likely to pass living wage ordinances, the location of a city being outside of the

South, having a larger municipal budget/revenue, and voting Democratic. (p. 763-764).

According to Swarts and Vasi (2011), their study was the first and only systematic one of

living wage ordinance diffusion to date. Importantly, they discussed a variety of important traits

of living wage campaigns, as well as its applicability to the minimum wage policy debate:

While the economic effects of living wage ordinances were limited, the

movement reframed the issue of wages squarely in the social justice tradition –

and it laid the groundwork for wider campaigns that affected hundreds of

thousands of people. In 2006, ACORN helped lead ballot initiative campaigns

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raising the state minimum wage in Arizona, Colorado, Missouri and Ohio, all of

which voters overwhelmingly approved. (Emphasis mine). The minimum wage in

these states was increased by $1.35 or more, delivering raises to 1.5 million

workers. Legislative campaigns raised the minimum wage for all workers in eight

states as well as some cities and one county: Albuquerque; Pine Bluff, Arkansas,

Washington, D.C., and Nassau County, New York. (p. 764).

In this context it can be seen that living wages share many similarities with minimum

wage campaigns – and can even be a precursor or sorts. Understanding the impetus for living

wage campaigns, the social, political and economic reasons, can point the way to where a

minimum wage might conceivably be successfully put forth.

Unsurprisingly, however, similar to the unresolved controversy over the disemployment

effect of the minimum wage, there are also differing opinions over the disemployment effect of

living wage ordinances. W. Lester (2011) found no significant negative employment impacts due

to employment. In fact, in cities enacting the living wage, “the equity-growth tradeoff is not a

hard and fast rule”, being as they are only one policy tool for economic development. Lester

argued that the conclusions based on observations of California cities were actually applicable to

other regions in the US, because of the variety and number of cities surveyed in contrast to a

traditional individual case study.

In contrast, S. Adams and D. Neumark (2005) found both a significant bottom-end wage

distribution as well as a significant employer response, which is “much larger than would be

expected based on the apparently limited coverage of workers by most living wage laws,” (p.

183). S. Adams and D. Neumark’s estimated wage elasticity was 0.05-0.07 (far smaller than the

estimated overall minimum wage employment elasticities found by D. Neumark and W. Wascher
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(2006). However, based on the subcategories discussed by Adams and Neumark such as business

assistance, contractor coverage (inclusiveness) and proximal living wage laws, there are at least

three important divisions Adams and Neumark made among the sample successful living wage

campaign cities. Therefore, it would make sense that there would be a relatively wide and

disparate range of effects of an on-the-paper blanket legislation. The employment response may

be due to the ability of firms to shift jobs elsewhere – thus calling into question whether the

localization of minimum wages might be offset by the moving of employment elsewhere.

A third reason that living wages offer valuable insight is due to their inherently localized nature –

that is, the living wage is suited to the cost of living of the area it was legislated in.

Baskaya and Rubinstein (2011) found opposite disemployment effects depending on

whether the disparity between the state minimum wage and the federal wage was taken into

account – in effect, whether the relative wealth of the state was factored in:

Consistent with previous studies we find mild wage effects and no evidence for

corresponding disemployment effects using the actual state effective minimum

wages. This holds in the long-run and the short-run. In contrast, we find notable

wage effects and corresponding disemployment effects when we use the

differential impacts of adjustments in federal minimum wages as the external

source of variation in state effective minimum wages floors. The long-run

elasticity of employment with respect to minimum wages is approximately −1.

Overall, there are striking similarities between the minimum wage and living wage, in

terms of both legislative and policy implementation, with localized minimum wages following

on the heels of living wage ordinances, as well as the ambiguity over the disemployment effect

of the wage law. The unique aspect of the living wage is its localized nature, is actually not
MINIMUM WAGE POLICY EMPLOYMENT EFFECTS AND POLICY IMPLICATIONS 14

solely the reserve of the living wage ordinance, as more and more minimum wage laws are being

passed at the local level.

Real World Consequences

While it is fine to closely examine the question of the minimum wage’s disemployment

effect from opposing sides, it leaves the question of why there is no definite answer or

statistically obvious effect unanswered. Fortunately, a variety of different factors, summarized in

several different meta-studies and synthesis studies of meta-studies, could explain the often

varying and contradictive conclusions reached from the same data. These include the variety of

adjustments channels may have in response to a wage increase, such as hours, workforce

composition, and efficiency, profit or other systemic changes.

J. Schmitt (2013) lists a variety of potential adjustment channels for firms seeking to

offset increasing labor costs associated with a minimum wage increase, which might explain the

obfuscated employment response. All of them relate to his contention that in reality, the cost of a

minimum wage increase to firms employing low-wage workers is actually quite small – that is,

“the cost shock of the minimum wage is small relative to most firms' overall costs and only

modest relative to the wages paid to low-wage workers,” (pg. 24). Schmitt then proceeds to

critique the conventional approach concerning the minimum wage disemployment effect,

pointing out that “In the traditional discussion of the minimum wage, economists have focused

on how these costs affect employment outcomes, but employers have many other channels of

adjustment,” (pg. 24). This is an important first step in examining the entire issue from a

different facet, in asking the question of how firms in the real world might respond, rather than
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how a hypothetical firm with only one lever for cost adjustment – hiring or firing workers –

would respond to a minimum wage increase:

Employers can reduce hours, non-wage benefits, or training. Employers can also

shift the composition toward higher skilled workers, cut pay to more highly paid

workers, take action to increase worker productivity (from reorganizing

production to increasing training), increase prices to consumers, or simply accept

a smaller profit margin. Workers may also respond to the higher wage by working

harder on the job. But, probably the most important channel of adjustment is

through reductions in labor turnover, which yield significant cost savings to

employers. (p. 24-25).

This emphasizes that employment reduction is only one of a dozen different adjustment

mechanisms, which would explain why its standalone change in response to a minimum wage

increase is more subdued than one would otherwise expect without the adjustment mechanism

framework presented by J. Schmitt (2013).

An additional consideration is the possibility of confounding factors (not in the strict

statistical sense). Many researchers note when considering minimum wage laws the differing

effects of the minimum wage on different worker age groups, especially teenagers, which may be

obfuscated when considered as part of the entire employment response. In addition to their

positions against the New Minimum Wage Research, D. Neumark and W. Wascher (2006)

argued that “the presence of a youth subminimum in particular states tended to reduce the impact

of the minimum wage in those states, as the standard model would predict,” (p. 9). This would

seem to indicate that teenagers are uniquely affected that minimum wage increases, if setting a

sub wage can reduce the overall employment impact of minimum wage increases.
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Unlike the debate over the overall minimum wage employment response, other

researchers all corroborated their findings. R. V. Burkhauser, K. A. Couch, D. C. Wittenburg

(2000) found that “The preponderance of the evidence indicates that increases in the minimum

wage during the 1990s led to modest but statistically significant declines in teenage employment.

We conclude that the elasticity of teenage employment with respect to the minimum wage lies in

the range of 2.2 to 2.6.” (p. 676). This value of employment elasticity is quite high (an order of

magnitude so), compared to D. Neumark and W. Wascher’s (2006) relatively conservative

values of -.1 to -.2.

Similarly, J. T. Addison, M. L. Blackburn, C. D. Cotti (2013) found that even in

recessionary environments, the most stringent and sensitive economic periods, there was not a

significant disemployment effect associated with minimum wage increases, except for teenager

in areas with already-high employment (pg. 37). Adding to this consensus, J. J. Sabia, R. V.

Burkhauser, and B. Hansen (2012) estimated that raising the New York minimum wage from

$5.15 to $6.75 per hour caused employment among 16- to 29- year olds to fall around 21%,

associated with a median elasticity of -0.7. While they do admit to finding a larger elasticity than

the consensus estimate, there is a clear pattern, largely in agreement, of the disemployment effect

being distinctly negative for teenagers (pg. 372).

Clearly, there is an amount of trade-off between wages and employment of particular

demographic groups, which makes deciding a minimum wage a challenging policy decision. One

possible solution lies in treating minimum wage as merely one policy tool among a toolbox of

legislation including business and labor standards, tax policy and welfare programs, to limit the

negative effects of any one policy tool.

MINIMUM WAGE POLICY EMPLOYMENT EFFECTS AND POLICY IMPLICATIONS 17

D. Lee and E. Saez (2012) recommended that in terms of practical policy

recommendations, using the minimum wage to enact additional [wealth] transfers to low-skilled

workers is more effective when low-skilled wages are downward rigid because of a binding

minimum wage. Lee and Saez are referring to the Earned Income Tax Credit (EITC). The

efficiency of both the tax policy and the minimum wage law increase when used in unison; in the

absence of a rigid wage, low-skilled wages would fall and high-skilled wages would rise through

wage incidence effects, partially offsetting the initial transfer (the EITC). However, with a

binding minimum wage, and under the strong assumption of efficient rationing, Lee and Saez

find that an ETIC expansion would increase after-tax incomes of low-skilled workers dollar-for-

dollar. (p.743). Given realistic tax and transfer policy, Lee and Saez (2012) concluded that

minimum wage increases the effectiveness of additional low-skilled worker transfers if wages

are downward rigid due to a binding minimum wage. The Earned Income Tax Credit (EITC)

could increase after-tax incomes of low-skilled workers dollar for dollar (and are thus

complementary).

Conclusion

No consensus from the exhaustive studies over the preceding past two decade has been

reached in the employment effect of the minimum wage. Rather, the preponderance of evidence

points to an effect that is at the minimum statistically insignificant, and may be irrelevant as far

as public policy is concerned. Thus, the minimum wage does not have a zero-sum trade off with

the employment of the affected workers. Schmitt (2013) supports this conclusion, arguing that

“research conducted since the early 1990s concludes that the minimum wage has had little or no

discernible effect on the employment prospects of low-wage workers,” (pg. 24).

MINIMUM WAGE POLICY EMPLOYMENT EFFECTS AND POLICY IMPLICATIONS 18

In terms of further progress on resolving the minimum wage debate, additional studies

could be conducted on the potential for localization of the minimum wages, where the cost of

doing business and cost of living match with the local minimum wage level, and thus the

prospect of employer flight is reduced. There are also potential areas of new research in

‘adjustment mechanisms’ for other low-wage worker employers throughout the extensive service

sector. However, the question of whether or not a minimum wage increase actually causes

disemployment is at this time inconclusive, so the null hypothesis of no demonstrable

disemployment effect is the default; and thus a policy debate on the implementation of a

minimum wage should not take it as support for either side.

The living wage, successful as it is, only covers a rather miniscule amount of the overall

U.S. population, the select cities that have passed living wage ordinances. Since they are a

predictor of having a follow-up minimum wage law, the rarity of them now largely makes more

numerous local minimum wage law an unlikely outcome. However, the fact that the living wage

has only been passed in some places also lends credence to the idea that wage policy is not ‘one

size fits all’. Cost of living is very different across the U.S., and it is due time that minimum

wage legislation take that into account, and not merely on the state level.

Ultimately, the primary purpose of minimum wage research (besides for knowledge’s

sake) is to inform policy makers on the best course forward concerning redistributive economic

policies. More studies and models, therefore, should take into account that minimum wage policy

is part of an overall economic framework, with employers in the service sector (as well as others)

responding to any regulation in a variety of ways, with effects not always readily apparent, and

that the government has a variety of tools to work with to achieve the goal of closing income

inequality and redistributing some wealth towards the lowest-wage workers. Nevertheless, the
MINIMUM WAGE POLICY EMPLOYMENT EFFECTS AND POLICY IMPLICATIONS 19

expansive breadth and scope of the research to date is testament to the acknowledgement by both

academics and policy makers of the importance of not being complacent about minimum wage

policy.
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