Jared Bernstein and John Schmitt. Economic Policy Institute. May 1, 1998.
“Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase”. When the federal government raised the minimum wage from $4.25 to $4.75 in 1996, and then to $5.15 in 1997, the usual crowd predicted economic doom (also that the benefits would mostly accrue to the middle-class or to teenagers—supposedly people who didn’t need the help).
This study shows that adults comprised 71 percent of the people whose wages the increase boosted. People in the bottom 20 percent of income distribution received 35 percent of the benefits. And four different tests of the wage increases’ affect upon employment shows that there was no significant job loss associated with the policy, and there certainly wasn’t the spike in unemployment that conservatives predicted.
