University of Washington

What will a higher minimum wage do? Two new studies have different ideas

What will a higher minimum wage do? Two new studies have different ideas

The federal government set its first minimum wage, at 25 cents an hour, in 1938. Since then, liberals have cheered attempts to raise the minimum as blows against worker exploitation, while businesses lament that the hikes will kill jobs.

But nearly 80 years later, economists still aren’t sure how a higher minimum wage actually affects companies and their customers.

Two recent studies out of California and Washington, which are both well on their way to a $15 floor, show just how hard it is to pin down exactly how businesses respond to higher labor costs.

One report, published Wednesday by UC Berkeley researchers, suggests that California will actually gain jobs because...

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