Mo' Money Mo' Problems:Investigating the Effects of the Minimum Wage on the United States Economy Through the Lens of the United States Housing Market

Abstract

This paper investigates the effect of the minimum wage on the United States housing market. The housing market is used in this paper as a lens to investigate how increases to the minimum wage affect both individuals as well as the entirety of the United States economy. In order to complete this analysis, I investigate the relationship between the minimum wage and three housing market variables: housing prices, housing starts, and housing foreclosures. Housing prices are investigated to estimate the impact that increases to the minimum wage will have on both inflation and consumer confidence. Housing starts are used as a barometer to measure if an increase in the minimum wage will stimulate growth in the economy. Finally, I examine housing foreclosures in order to understand how individuals are impacted by increases in the minimum wage. The main findings of this paper demonstrate that an increase in the minimum wage will yield an increase in housing prices; a decrease in housing starts and an increase in foreclosures.