Arin Dube

So just as a way of thinking about this, if we have a really well-functioning market, labor market, where companies are really competing hard for workers, if suddenly the government comes in and sets wages even higher than what companies are paying, some jobs will be lost because companies are just not going to be willing to hire those individuals.

At the same time,

If the market is not quite working that way and the market has, here's a funny word that economists use, monopsony power, which means that employers have some degree of choice.

Should I pay a higher wage and have lower quits and easier recruitment?

Or should I pay a lower wage and save on labor costs, but then have higher quits and harder time recruiting?

In such a market, a higher minimum wage could end up not killing jobs, but killing vacancies and reducing turnover.

So then it becomes an empirical question.

And so here's what we found.

So when I look at this, 2010 to 2025, a broad set of 15-year period,

In the states that raise their minimum wage, if you take the most impacted sector, that's restaurants, okay?

This is the low-wage sector, a sizable portion of the minimum wage workforce work at restaurants.

Restaurant pay in these 30 states today is maybe about, on average, like 8% or 9% higher than in the other 20 states.

OK, then that it then it was say compared to 2013 before this gap emerged.

So very clear wage growth in these 30 raised states compared to the 20 states that stayed put.

What happened to jobs?

We can look at restaurant jobs per capita.

It is virtually the same today as it was in 2013 in these two states.

So clear increase in wage, pretty much sideways change in jobs in the most highly impacted sector, restaurants.

There's a number of things to think about.

So one thing I will say is that, by the way, this is the simplest comparison, but of course we can make fancier comparisons.