People Versus Machines: The Impact of Minimum Wages on Automatable Jobs

Grace Lordan and David Neumark

No 23667, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the effect of minimum wage increases on employment in automatable jobs – jobs in which employers may find it easier to substitute machines for people – focusing on low-skilled workers for whom such substitution may be spurred by minimum wage increases. Based on CPS data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become nonemployed or employed in worse jobs. The average effects mask significant heterogeneity by industry and demographic group, including substantive adverse effects for older, low-skilled workers in manufacturing. We also find some evidence that the same changes improve job opportunities for higher-skilled workers. The findings imply that groups often ignored in the minimum wage literature are in fact quite vulnerable to employment changes and job loss because of automation following a minimum wage increase.

JEL-codes: J23 J38 (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-hrm, nep-lma and nep-ltv
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Citations: View citations in EconPapers (15)

Published as Grace Lordan & David Neumark, 2018. "People Versus Machines: The Impact of Minimum Wages on Automatable Jobs," Labour Economics, .

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Journal Article: People versus machines: The impact of minimum wages on automatable jobs (2018)
Working Paper: People versus machines: the impact of minimum wages on automatable jobs (2018)
Working Paper: People versus machines: the impact of minimum wages on automatable jobs (2018)
Working Paper: People versus Machines: The Impact of Minimum Wages on Automatable Jobs (2018)
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