Minimum wage hikes killed jobs during the Great Recession, according to a new working paper published by the National Bureau of Economic Research.
Low-skilled workers were hit especially hard by the minimum wage hikes. For those with less than a high school education, from age 16 to 30, the employment rate dropped by 13 percentage points from 2006 to 2010. The paper estimates that 5.6 percentage points, or 43 percent, of that drop was caused by minimum wage increases.
The paper was authored by Jeffrey Clemens, an assistant professor with the University of California, San Diego's economics department.
"Between 2006 and 2012, the average effective minimum wage rose from $5.82 to $7.55 across the United States," Clemens writes. "The evidence supports the view that this period's minimum wage increases had significant, negative effects on low-skilled workers' employment."
Clemens blames the job losses on the federal increase because it forced minimum wage hikes in 27 states.
In theory, minimum wages put low-skill workers out of a job because the workers cannot get a job that allows them to learn soft job skills like punctuality or communication. Fewer than four percent of hourly American workers are paid minimum wage or less. Most work fewer than 35 hours a week.
Congress and President George W. Bush signed into law a minimum wage increase in May 2007, with increases gradually taking effect in July 2007, 2008 and 2009. The current federal minimum wage stands at the same level it rose to in July 2009: $7.25 an hour.
Jason Russell is a commentary writer for the Washington Examiner.