Report

The potential economic impact of increasing the minimum wage in Massachusetts

Abstract: In this report I review the arguments on both sides of the issue. In doing so, I discuss and critique, where applicable, the evidence presented in the two reports that have been issued on either side of the debate. I also produce my own projection of the likely impact of raising the minimum wage on aggregate employment and wages. These calculations use the two reports as a baseline, modifying some of the assumptions to better reflect evidence supported by the economic literature. According to my estimates, the current proposal to increase the minimum wage could have a negative impact on employment ranging from 2,100 to 10,500 jobs, or 1 to 4 percent of workers whose wages would be affected by the bill. On net, the combined impact of the two wage increases would raise aggregate wages by approximately $255 million.

Keywords: Minimum wage - Massachusetts;

Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: New England Public Policy Center Research Report

Publication Date: 2006

Number: 06-1