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Economics

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Increasing the minimum wage reduces employment among low-wage workers

Minimum wage increases are intended to raise the earnings of low-paid workers, but the result of increasing the minimum wage is not always what is intended in sense of the effect on employment. The claim here is that increasing a legally mandated minimum wage causes affected employers to reduce employment, hours, or hiring among low-wage workers. This depends on various factors such as the size of the wage increase, the workers, the industry(ies) affected, and the economic conditions in which the policy is introduced.

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Updated 6 Sept 2026