Minimum Wages: What Does the Research Tell Us about the Effectiveness of Local Action?

Brief

Minimum Wages: What Does the Research Tell Us about the Effectiveness of Local Action?

January 16, 2019

Abstract

As real wages stagnate, racial disparities grow, and housing prices soar in cities across the US, local governments are increasingly adopting laws and regulations that aim to reduce inequalities and improve access to economic opportunity for their residents. At the same time, states are increasingly enacting laws that limit or preempt local action in these areas, often relying on a thin or nonexistent evidence base to suggest that local regulation is inefficient or overly burdensome. Minimum wages are one domain that has become increasingly subject to state preemption, especially since 2013. Proponents of state preemption of minimum wages often cite concerns about having a patchwork of wage levels across the state, and claims that a higher local minimum wage puts the locale city or county at a competitive disadvantage relative to surrounding areas. Local minimum-wage laws can help ensure that workers can afford housing, food, and other basic necessities in locations where the cost of living is higher than in other parts of the country or state. In this brief, we synthesize the evidence on the effectiveness of minimum-wage laws and suggest areas in which further research could help policymakers, advocates, and the public improve local minimum-wage laws.

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