Do minimum wage hikes raise US long term unemployment? Evidence using state minimum wage rates

Several recent studies have challenged the conventional notion that raising the minimum wage reduces employment. This study considers a related but re latively unexplored issue by examining the minimum wage's influence on long durations of unemployment. By considering long term unemployment rates, th is study extends the previous minimum wage literature by examining the pers istence of minimum wage effects. The empirical analysis considers state dat a from the latter 1980s, a unique period when many states raised their mini mum wage above the federal level. The results suggest that a greater minimu m wage increases long term unemployment rates. Further evidence indicates t hat increased minimum wage coverage also raises long term unemployment rate s. Subsequent analysis yielded similar patterns for other aggregate labour market measures. Thus, state and federal policy makers should weigh these p otential costs in deciding whether to increase minimum wage rates in the fu ture.