The Curious Case of the Minimum Wage – An Empirical Analysis of the Relationship Between Minimum Wages and Employment Levels by Counties and Sectors

Abstract

The relationship between the American minimum wage and employment has been one of the most confounding economic topics of the past century. Like a fine wine, the research and methodologies used by both sides of the argument have only grown more sophisticated and refined over time, but there remains no clear consensus. Political and economic developments in the past decade regarding living standards and income inequality have brought this topic into the forefront of American society. In light of the several angles used to explore this topic, this paper seeks to explore the relationship between state minimum wages, minimum wage worker and total county employment levels across the nation, and specific business sector employment levels, through the use of four scenarios. This paper finds some statistically significant support that minimum wages at higher levels of minimum wage worker employment levels have a small and positive effect on employment in some individual business sectors and county labor forces.