User:Adam conlon/Minimum wage

Relative Minimum Wage Relative minimum wage is the ratio of the national median wage. This varies from country to country. A higher relative minimum wage means that there is a large gap between the minimum wage of that given area and the national median wage. This occurs in low income areas. The national U.S. national relative wage is about .36, which is the lowest out of any industrialized country. Recent studies have shown that there is evidence to suggest that minimum wage does not increase unemployment, which is contrary to the believe up until the 2000s. Recent studies show that the areas which have a higher national median wage are considered “high impact areas.” High impact meaning that these areas are at a higher risk for minimum wage policy to directly impact that community. In these high impact areas studies show that an increase in minimum wage increases employment, wages, and decreases poverty. These new studies help show how minimum wage can help reduce the gap in low income areas as well as increase the standard of living.[29]

New Research on the Price Pass Through Effects on Minimum Wage

The pass through effect is the minimum wage effect on prices. This has gotten a lot less attention than the minimum wage’s effect on unemployment. The few studies that have been done on the price pass through effects show that prices rise when minimum wage is increased. Recent evidence by the Upjohn Institute for Employment Research shows that a 10% increase in the minimum wage leads to about a .46 % increase in prices (this is equivalent to a $5.00 hamburger becoming a $5.02 hamburger.) Before this study done in 2016, the last series of studies were done in 1997. MacDonald, Daniel. 2016. "New Research on the Price Pass-Through Effects of the Minimum Wage." Employment Research 23(4): 5-6.

The Optimal Level of Minimum Wage This study by the American Economic Journal indicates that the optimal level of the minimum wage is likely to vary across industries, cities, and countries. Raising the minimum wage is likely to cause limited disemployment effects or efficiency losses. Moreover, in cities where mainly rich consumers enjoy the services provided by low wage workers this redistribution will be from rich to poor. Setting a higher minimum wage in the non-tradable sector than in the tradable sector can push up wages relatively more. Given the relatively small effect on employment, the results also suggest that minimum wages can redistribute income from consumers to low-wage workers without large efficiency losses. This study could impact the debate over a federal minimum wage. If the ideal minimum wage is different for different areas, then that could change the stance on a wage that is constant throughout the United States.

Effect of Minimum Wage on Health There is a large debate going on about the effect that minimum wage has on overall health. As there is usually two sides on this minimum wage debate, there is for this portion as well. Some studies such as the study conducted by the American Journal of Public health and the NBER, show that there is a negative impact between a lower minimum wage and infant health. Using data on the universe of births in the US over 24 years the study finds that an increase in the minimum wage is associated with an increase in birth weight driven by increased gestational length and fetal growth rate. An increase in prenatal care use and a decline in smoking during pregnancy, which are some channels through which minimum wage can affect infant. Results from the study indicate that there is a growing amount of evidence that labor market policies that enhance wages can affect the well being in broader ways than often considered. A dollar increase in minimum wage above the federal level is associated with 1% to 2% decrease in low birth weights and a 4% decrease in post neonatal mortality. Despite the established link between low income and ill health, few studies have examined how minimum wage policies affect health outcomes. This study proposes that if all states in 2014 had increased their minimum wage by 1$, there would likely of been 2790 fewer low birth weight births and 518 fewer post neonatal deaths. A recent literature review found that fewer than thirty-five studies on the health effects of minimum wages, with the majority coming since 2016. This shows that an interest has peaked as of recently in the economic world of research. As more data continues to come out, more heads will turn to this debate as well. Some arguments against a raise in minimum wage ($15 being the usual target number that people use) argue that an overall increase to $15 is impossible to do cost. Hopefully with an increase interest there will be more of a consensus in the future on this topic. While more data is shared and reviewed on the topic of Minimum Wage and Health, only more light will be shed on the validity of either side of the argument.