Minimum wages - what is the effect?

Question

Does anyone know a good review on the debate on effects of minimum wages?

I am interested both in academic and non-academic sources. I have searched a lot but there is so much material written on minimum wages that it seems a bit like a jungle. Anyway, I have not been able to find any non-biased reviews of the research on the topic.

Answer 1

I will focus on academic literature reviews since they tend to be unbiased (or at least less biased) - academic literature reviews are often accessible even to non-specialists as they usually do not go deep into models as they try to provide broad overview of the topic:

Good (and highly cited) literature review on this topic are:

Neumark, D., & Wascher, W. (2006). Minimum wages and employment: A review of evidence from the new minimum wage research (No. w12663). National Bureau of Economic Research.

Card, D., & Krueger, A. B. (2015). Myth and Measurement: The New Economics of the Minimum Wage-Twentieth-Anniversary Edition. Princeton University Press.

Neumark, D., Wascher, W. L., & Wascher, W. L. (2008). Minimum wages. MIT press.

Manning, A. (2020). The elusive employment effect of the minimum wage. Journal of Economic Perspectives.

Doucouliagos, H., & Stanley, T. D. (2009). Publication selection bias in minimum‐wage research? A meta‐regression analysis. British Journal of Industrial Relations, 47(2), 406-428.

Neumark, D., Salas, J. I., & Wascher, W. (2014). More on recent evidence on the effects of minimum wages in the United States. IZA Journal of Labor policy, 3(1), 24

Maloney, W. F., & Nunez, J. (2000). Measuring the impact of minimum wages: Evidence from Latin America. The World Bank

However, note there is no full consensus in economics on minimum wages. For example, have a look at (this recent pol among the best US policy economists on effects of increases in the minimum wage on us employment) and you will find that most policy economist are uncertain, and the 'pro' and 'against' camp are almost equally split.

Consequently, you will see that some of the papers/books above are more cordial and some more critical of minimum wages - this does not mean the researchers are biased. Sometimes it is very hard to read empirical evidence and to reach some 'definitive' conclusion. For example, one reason why there is so much controversy is that in principle you should expect even relatively large increases in minimum wage to have smaller effects where original minimum wage was far below median wage and different ones when it is closer to median wage. This can often lead to situations where research in different places might yield contradictory evidence.

In such cases people will disagree and it is very hard not to tilt toward one side of an argument or the other but that is not necessarily evidence for bias per se as people can emphasize different things. In the above list I strived to strike some balance among those economists who are less and more cordial toward minimum wage (although I think both sides of the debate try to be unbiased) so together it should make a balanced overview. Lastly, the above is just tip of an iceberg minimum wage is probably one of the most extensively researched economic policies but they should help you to orient yourself in the literature and also point toward solid primary research on the issue.