Using data from the Current Population Survey, Jeffrey Clemens of the University of California, San Diego, and Michael Strain of the American Enterprise Institute find that some employers in the low-wage labor market pay workers less than the minimum wage. Examining a series of minimum wage increases from 2011 to 2019, the authors estimate that workers would have gained an additional 14 to 22 percent if employers had fully complied with the increases. While compliance with minimum wage laws is the norm, the authors say, avoidance and evasion are nontrivial. The authors also find that minimum wage increases lead to more underpayments in states with strong enforcement regimes. “Increases in avoidance and evasion can be large under strong enforcement regimes because evasion is more prevalent under weak enforcement regimes to begin with,” they say.
Chosen excerpts by Job Market Monitor. Read the whole story @ Hutchins Roundup: Small businesses, poverty, and more.