EMPLOYMENT EFFECTS OF TWO NORTHWEST MINIMUM WAGE INITIATIVES

Larry D. Singell and James R. Terborg

Economic Inquiry, 2007, vol. 45, issue 1, 40-55

Abstract: This article exploits a natural experiment initiated by Oregon and Washington voter referendums to show that the minimum wage is a blunt instrument that differentially affects low‐wage workers within and across industries. Specifically, employment growth specifications indicate that the minimum wage generates consistently negative employment effects for eating and drinking workers where the minimum is shown to be relatively binding, but not for hotel and lodging workers where the minimum is less binding. Regressions using job‐specific want‐ad data from Portland and Seattle newspapers also indicate a reduction in hiring solicitation relating to the extent that the minimum wage binds. (JEL J31, J38)

Date: 2007
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