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Center for Economics and the Environment: Policy Series


The minimum wage has long been a contentious policy issue, but particularly so in Missouri in recent years. When St. Louis raised its city minimum wage in 2015, with increases planned to $11 per hour by 2018, legal battles held up implementation and a state law eventually overrode the local ordinance. This essay delves into the sources of this policy dispute, first by examining the theoretical issues involved, then focusing on recent research, particularly regarding outcomes other than the traditional focus on employment outcomes. Using minimum wage increases as an anti-poverty policy is not likely to succeed. While the empirical evidence using more traditional models is decidedly mixed, once we allow for longer-lived dynamic effects, the evidence shows that job growth declines among those most often viewed as beneficiaries of minimum wage increases. Already-marginalized groups are likely to be hardest hit as employers substitute towards workers with more experience.

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Jonathan Meer is a professor of economics at Texas A&M University and a research associate with the National Bureau of Economic Research.

Acknowledgements: I am grateful for comments from Jeffrey Clemens and Jeremy West.

Funding for this study was made possible by the Hammond Institute's Center for Economics and the Environment, Lindenwood University.

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Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License
This work is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 4.0 International License.