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$1 increase in minimum wage would cost thousands of jobs

Wednesday, August 16, 2017  
Posted by: Taylor Salvato
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$1 Increase In Minimum Wage Would Cost Thousands Of Jobs
By: Robert Donachie

A $1 increase in the federal minimum wage could cost the national economy tens of thousands of jobs, according to a new study by economists Grace Lordan of the London School of Economics and David Neumark of the University of California, Irvine.

The economists sourced through 35 years of data and found that increasing the minimum wage incentivizes firms to automate low-skilled labor–the very individuals who would stand to benefit the most from even marginal increases in compensation. The pair focused on workers with only a high school degree, as this group is largely the target of minimum wage laws.

Lordan and Neumark used data from 1980-2015, which only shows an increase of the minimum wage from $6.77 to $7.77. The findings could have some insights into the current labor market, especially given the recent “Fight for $15” campaigns going on around the U.S.


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