A $15 Federal Minimum Wage is Outside Historical Experience

Ian Fillmore ()
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Ian Fillmore: Washington University in St. Louis

No 2021-048, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: How informative is historical experience with the minimum wage about the consequences of raising the federal minimum to $15? This paper compares a hypothetical $15 federal minimum to the most recent federal minimum wage increase, in 2007, from $5.15 to $7.25. I describe a straightforward method for using publicly available data from the Occupational Employment and Wage Statistics (OEWS) program to assess whether a proposed minimum wage increase is within historical experience. I illustrate the method by comparing the occupations and industries most directly affected by the 2007 increase with those that would be affected by a $15 minimum wage. By any measure, a $15 minimum wage is far outside historical experience—in both its size and the breadth of occupations and industries it would affect—and the frontier of historical experience is a minimum wage between $9 and $11 per hour. I recommend that future minimum wage proposals, both federal and local, include a similar analysis to assess whether the proposal is within historical experience. Finally, I argue for future research to take advantage of several scheduled state-level minimum wage hikes to estimate heterogeneous employment effects by occupation and industry.

Keywords: employment; Occupational Employment and Wage Statistics; OEWS (search for similar items in EconPapers)
JEL-codes: J31 J38 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-isf
Note: MIP
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http://humcap.uchicago.edu/RePEc/hka/wpaper/Fillmo ... e-historical-exp.pdf First version, September 15, 2021 (application/pdf)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Fillmo ... torical-exp_rev1.pdf Second version, October 20, 2021 (application/pdf)

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