POLICY RESEARCH
What the Research Actually Says About Minimum Wage Impact
This page does not take a policy position. We present the evidence and link to the primary sources; readers decide. Framing is neutral. Last verified April 2026.
What the Evidence Shows With High Confidence
Small increases have small employment effects
Minimum wage increases in the range of 10-25 percent above the existing floor consistently show small to near-zero employment effects in the majority of studies. The pre-2010 consensus that any minimum wage increase reduced employment has been substantially revised.
Affected workers' earnings increase
Workers who remain employed after a minimum wage increase see unambiguous income gains. This effect is consistent across all major studies. The debate is about whether the income gains are partially offset by reduced hours or employment for some workers.
Very large increases show larger but still debated effects
Increases of 50 percent or more above the existing floor (e.g., going from $7.25 federal to $15 in one step in a low-wage area) produce estimates of larger employment effects, particularly for low-wage industries, though researchers disagree on magnitude.
Congressional Budget Office Analyses of Federal Proposals
CBO 2019: Raise the Wage Act ($15 by 2024)
The CBO's July 2019 report on the Raise the Wage Act estimated: 1.3 million workers lifted out of poverty; 17 million workers receiving higher pay directly; 1.3 million workers (median estimate) losing their jobs. The employment range was 0 to 3.7 million job losses. The CBO noted high uncertainty around the employment estimates. Key caveat: this modeled a phased increase to $15 by 2024, well before the actual legislative debate over a 2026 or 2027 implementation date.
CBO 2021: Raise the Wage Act ($15 by 2025)
The CBO's February 2021 report estimated: 900,000 workers lifted out of poverty; 17 million workers receiving higher pay; 1.4 million (median) job losses. The employment loss range was 0 to 2.7 million. The CBO also noted potential acceleration of automation in affected industries. The Senate parliamentarian ruled in February 2021 that the provision could not be included in the budget reconciliation bill, killing the proposal's fastest path to passage.
CBO 2023: Raise the Wage Act ($17 by 2028)
The CBO's November 2023 report on a revised proposal estimated: 1.3 million workers lifted out of poverty; 19.8 million workers receiving higher pay; 700,000 (median) job losses -- a lower employment estimate than the $15 proposals, partly because the 2023 proposal phased in more slowly relative to a higher existing floor of state rates. Employment loss range: 200,000 to 1.7 million. The slower phase-in and longer runway allowed more employer adjustment.
Key Academic Studies
Card and Krueger (1994) -- "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania"
The landmark study that challenged the received wisdom that minimum wage increases always reduce employment. Card and Krueger compared fast-food employment in New Jersey (which raised its minimum) against Pennsylvania (which did not) and found no negative employment effect. The paper generated decades of debate. Card won the Nobel Prize in Economics in 2021, partly for this line of research.
Neumark and Wascher (various) -- The Counter-Evidence
Economists David Neumark and William Wascher are the leading academic critics of Card-Krueger. Their research across multiple papers (1992-2020s) consistently finds negative employment effects, particularly for teen and low-skilled workers, when state-level minimum wage increases are studied with different methodology. Their work uses a broader set of control states and finds the Card-Krueger methodology unreliable.
Dube, Lester, and Reich (2010) -- Border-Discontinuity Methodology
Arindrajit Dube and colleagues refined the empirical approach by comparing counties on opposite sides of state borders -- places that are as similar as possible except for the minimum wage. This methodology consistently finds smaller employment effects than studies using national control groups. Dube's work has become the methodological benchmark for minimum wage research and has significantly shifted the academic consensus toward smaller employment effects.
Cengiz et al. (2019) -- The Bunching Estimator
Economists Doruk Cengiz, Arindrajit Dube, Attila Lindner, and Ben Zipperer introduced a new approach examining the distribution of wages around the minimum wage threshold. They found that US minimum wage increases 1979-2016 raised income at the bottom of the wage distribution with minimal employment effects. This paper is widely cited as the most credible evidence of small disemployment effects for moderate increases.
UK
UK Low Pay Commission Evidence Reviews
The Low Pay Commission publishes annual evidence reviews that are among the most thorough assessments of minimum wage effects in any country. Because the UK has a single national rate with 27 years of continuous data, the LPC can track effects over time in ways that are more difficult with US state-level variation.
The consistent LPC finding across its 2019-2025 evidence reviews: UK minimum wage increases have not produced the disemployment effects predicted by classical economic models. Employment in low-wage sectors (hospitality, retail, care) has generally grown alongside minimum wage increases, though the LPC notes some evidence of hours reduction rather than employment reduction as the primary adjustment mechanism.
The LPC also monitors productivity effects: some evidence of modest automation investment by low-wage employers in response to higher wage floors, consistent with the economic theory that higher labour costs spur capital substitution at the margin. The magnitude of automation response in UK data is small relative to the wage gains for workers who remain employed.
Why Effects Vary So Much by Location
A minimum wage increase from $7.25 to $15 has a very different economic character in rural Mississippi (where median wages are around $16/hour and the increase would affect a large share of the workforce) versus San Francisco (where the median wage is over $35/hour and a $15 minimum wage affects a tiny slice of the labour market). Research that treats these as the same type of increase will produce misleading results.
This is why the "bite" of the minimum wage -- typically measured as the minimum-to-median wage ratio -- matters more than the nominal rate. A minimum wage at 50 percent of the local median is historically consistent with small employment effects; one at 70-80 percent of the local median enters territory with much less empirical precedent. As Washington State's rate approaches 50 percent of the state median and DC's approaches 60 percent, these jurisdictions are providing new data on higher-bite minimum wages that will reshape the research literature over the coming decade.