Showcase of Undergraduate Research and Creative Endeavors (SOURCE)

The Relationship Between Minimum Wage and Employment in Low-Income Areas

This paper aims to analyze the relationship between the relationship between a minimum wage and low-income areas, specifically employment. One of the main concerns with raising the minimum wage is that it will increase unemployment because small businesses do not have the money to spend on wages. Throughout this paper, I will be looking at specific examples and data collected through the last 30 years to see the relationship between the minimum wage and employment but in the areas that need it the most, that being low-income, more urban areas. The consensus throughout my findings is that yes, raising the minimum wage by a significant amount, such as the proposed $7.75 increase, will have a quantifiable impact on employment and wages of those working minimum wage jobs in those more urbanized areas. In a rather dated, but scientifically important paper, there was shown to be a 1-2% decrease in employment if the minimum wage increased even 10%. In other areas, and among minorities, the employment effects are less noticeable and actually see a decline in child and household poverty. A majority of modern research has supported this claim that increasing minimum wage, especially in modern, low-income, and areas with significant poverty, has little or no impact on employment but has a noticeable effect on wages and the decrease of poverty.