The impact of the minimum wage on employment is visualised through the blue bars, which show the minimum wage induced change in the employment-to-population ratio of each relative wage group relative to the pre-treatment year period. [...] 15 The green line shows the cumulative change to the average wage.26 It evolves similarly for both groups in the initial part of the relative wage distribution, but where it then levels off for white workers, we see another bump for black and Hispanic workers due to the increase in workers earning $3-$4 more than the new minimum wage. [...] We reduce the panel to a pooled cross-section at the individual level, allowing us to relate wage changes to minimum wage policy and, crucially, to the person’s wage at the first interview.28 Equa- tion 3 describes the regression setup, 26 WBWe define the cumulative change in the∑average wage w r as kk Ek /w̄−1 w∑here w̄−1 is the average pre- treatment wage of workers earning less than the new min. [...] We control flexibly for the separate earnings profiles of black and white workers by in- cluding the ratio of the individual’s initial hourly wage to the state median wage that month, both linearly and squared. [...] in initial wage levels.32 Figure 4 shows the wage gains for black/Hispanic workers are in the range of $3 and $4 above the new minimum wage (unlike the case for white workers).
- Pages
- 55
- Published in
- United States of America
