Impact of Minimum Wage Increases on Employment Levels in the United States

Abstract

Purpose: The aim of the study was to assess the impact of minimum wage increases on employment levels in the United States. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Research on the impact of minimum wage increases on employment levels in the United States has yielded mixed findings. While some studies suggest that modest increases in the minimum wage have minimal to no adverse effect on employment, others indicate potential negative consequences, particularly for low-skilled workers and certain industries. Recent meta-analyses and empirical studies have shown that the employment effects of minimum wage hikes can vary depending on factors such as the magnitude of the increase, the local labor market conditions, and the specific industries affected. Moreover, research increasingly emphasizes the importance of considering not only employment levels but also other outcomes such as wage distribution, poverty rates, and overall economic well-being when evaluating the overall impact of minimum wage policies. Implications to Theory, Practice and Policy: Neoclassical economics, labor market segmentation theory and new keynesian economics may be use to anchor future studies on assessing the impact of minimum wage increases on employment levels in the United States. Practically, policymakers should consider the empirical findings when designing and implementing minimum wage policies. From a policy perspective, the empirical studies highlight the importance of evidence-based policymaking in the minimum wage arena.