Economic Impact Evaluation of the City of Saint Paul’s Minimum Wage Ordinance
Karabarbounis et al.
Executive Summary:
The minimum wage in Saint Paul increased by 29 percent from 2017 to 2021. Our analysis finds that this increase resulted in higher wages and lower employment.
Specifically, as of 2021Q4, the increase in the minimum wage was associated with an average increase in hourly wages of 0.5%, an average decline in jobs of 2.2%, an average decline in total hours worked of 2.3% and an average decline in wage earnings of 2.1%. The largest effects are found in the restaurant and the retail industries, in lower-paying establishments, and for lower-paid workers.
Twist the knife a little more into those over done poor minimum wage workers.
Do not discuss the FED rate hikes.
Nothing to see here…move along…
oh just thought about the next statement concerning your reasons for inflation.
But the reason we have much of the inflation is lower taxes on the wealthy, China no longer exporting goods as a deflationary force…and mismanagement by the supply side econ guys.
The researchers compared the Twin Cities to other ZIP codes in the state that didn’t have the minimum wage increases so that effects such as rate changes were minimized. (By the way, interest rates were lower at the end of the study period than at the beginning.)
Indeed. Did you think the researchers weren’t aware of that?
Loukas Karabarbounis – professor of economics at the University of Minnesota, a senior research economist at the Federal Reserve Bank of Minneapolis, a faculty research fellow at the National Bureau of Economic Research, and an associate editor at the Journal of Monetary Economics.
Jeremy Lise – research consultant at the Federal Reserve Bank of Minneapolis and Carter-Schwab Professor of economics at the University of Minnesota. Before coming to Minnesota, Jeremy taught at University College London.
Anusha Nath – joined the Federal Reserve Bank of Minneapolis as an economist in 2016. She has taught at Boston University, Delhi University, and the University of Minnesota.
I’ll admit to not having read the 50+ pages, but if you read page 1-2 that has the overview of the analysis, that seems to be what the report is doing. Comparing to cities with comparative sizes and exposure to the Pandemic that didn’t raise the min Wage is one part of the comparison
Across St. Paul’s restaurant industry, the city’s 2018 minimum wage hike was responsible for drying up nearly one-third of available jobs, the study found. In “limited-service” (fast food) restaurants, both hours and earnings fell by more than half after the increase took effect.
“These were larger effects than what even we expected — though we had no idea before we went into the study what we would find,” said co-author Anusha Nath, a senior research economist at the Fed.
I love this research. Following along, if we cut all the minimum wage hourly rates in half, we’d have more jobs! And cut them in half again, and we’d have even more! Oh, the ecstasy! Cut them in half one more and you’re back to Alabama in the 1850’s, where you barely had to give people enough to eat. No need for efficiency or mechanization, even!
Across St. Paul’s restaurant industry, the city’s 2018 minimum wage hike was responsible for drying up nearly one-third of available jobs, the study found. In “limited-service” (fast food) restaurants, both hours and earnings fell by more than half after the increase took effect.
A few things. These things are often petulant backlash from businesses. “You’re not doin’ me enough!” So they fire people
and say: “See, it’s that wage increase (or tax increase” )Don’t blame me. I didn’t have anything to with it. Yeah. Only everything to do with it.
If these people can’t make money (or the money they think God has entitled them to make) with some fast food business or related thing, without scraping the bottom of wages, then why does the job exist at all in the first place? Clearly there is no money to be made. PS: Does anybody believe one third of available jobs dried up? If so, these are likely jobs not to be bragging about anyway. Barely hanging on, razor’s edge jobs. But here they’re worth reporting on in a most hand-wringy fashion
“These were larger effects than what even we expected — though we had no idea before we went into the study what we would find,” said co-author Anusha Nath, a senior research economist at the Fed.
And if we raised the minimum wage to $50 we’d have a lot fewer jobs. If you were one of the lucky ones though and still had a job, then you’d do a lot better.
From the news article: The wage hikes accounted for the loss of an estimated 5,000 jobs in Minneapolis and another 3,800 jobs that dried up in St. Paul, Nath said in an interview…
“I really think the debate about whether minimum wages cost jobs should be over,” said Neumark — but he also added: “That doesn’t mean that minimum wage is a bad idea, right? It means there’s a cost. It means we have to think about trade-offs.”
Also, the numbers are meaningless unless compared to other cities that didn’t raise the minimum wage.
What you wrote, and what I was responding to was:
“Also, the numbers are meaningless unless compared to other cities that didn’t raise the minimum wage.”
That they did.
Of course. How could they not? The pandemic affected all of Minnesota as did changes in interest rates.
By the way, the data for the study began in 2017. Minneapolis wage increases began in January 2018 so they had two years of data before the pandemic. The study also included “effects of the policy change as the economy was recovering from the pandemic in 2021.” The study will last until May 2029.
"First, we present results from an analysis that compares Saint Paul with other cities in the United States with comparable size and exposure to the pandemic but no changes in their minimum wage policies…
"Third, we follow workers over time to examine how workers’ exposure to the minimum wage increases affected their labor market outcomes…
"The stability and robustness in our estimates give us confidence that our empirical evidence is capturing the effects of the minimum wage increase rather than the potential effects stemming from other developments, such as the pandemic or the civil unrest following the murder of George Floyd…
“Additionally, using other U.S. cities allows us to control for nationwide changes in economic conditions such as the substitution of services prone to virus transmission with online shopping, the rise of gig work, and labor shortages in low-wage industries.”
So what is the unemployment rate NOW. That study looks to be asinine.
Now tell me Doctor, an unemployment rate of 2.8 percent is bad? So nobody can find jobs? This just seems like another thread looking to bring up drama.
Right Jerry but if you look at the link I gave you St Paul did have very high unemployment in May 2020 but it has consistently been coming down. Of course 2020 was the heart of the pandemic. I just look at the unemployment rate right now, across the United States, and shake my head when anyone complains it is to high. Because we do not have an unemployment problem.
Minimum wage in 73 was $1.60/hr. If increasing the minimum “killed jobs” as the “JCs” and their water carriers insist, the last “jobs” would have vanished from Shiny-land decades ago.