Who-d a-Thunk It? Mandated minimum wage increases have adverse effects and lead to lower compensation?

Some new research — “Evidence of The Unintended Labor Scheduling Implications of The Minimum Wages” — shows that every $1 an hour increase in government-mandated minimum wages (“political wage-setting”) leads to the following (mostly) adverse outcomes:

  • a 27% increase in the total number of workers scheduled to work each week

  • a 20.8% decrease in the average number of hours each employee worked per week

  • a 13.6% decrease in the total wage compensation of an average minimum wage worker

  • a 23% decrease in the percentage of employees working more than 20 hours per week (making them eligible for retirement benefits)

  • a 14.9% decrease in the percentage of employees working more than 30 hours per week (making them eligible for health care benefits)

  • a 33% increase in fluctuations in the number of hours worked per week

  • a 9.5% increase in fluctuations in the number of hours worked per day

  • a 9.8% increase in fluctuations of shift start times and

  • average net losses of at least $1,590 per year per employee, equivalent to 11.6% of workers’ total compensation (assuming that workers were able to use their reduced hours to work a second job — an assumption which may not hold true for many employees).

Source: Who-d a-Thunk It? Mandated minimum wage increases have adverse effects and lead to lower compensation?