Research

Minimum Wage Policy and Employment in the U.S. and France

October 3, 2012

This paper compares trends in low pay employment in the US and France.

It is conventional to define low pay as less than 2/3 of the median wage. The low-wage share of US employment has been stable at around 30 percent since the 1970s, a level far higher than any other wealthy country. This stability has masked enormous increases in low-pay incidence for young workers, including those with more than a high school degree. In contrast, French labor market policy over the same period has been committed to eliminating low pay, mainly via large and steady increases in the minimum wage, and the French low-wage share has dropped to just 10 percent. Does the French evidence suggest that the US minimum wage cannot be raised substantially without “pricing-out” large numbers of vulnerable workers from their jobs? We find no support in the aggregate data for this conventional prediction.

Authors: David R. Howell, Bert M. Azizoglu and Anna Okatenko
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