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Open Access Publications from the University of California

The Employment Effects of a $15 Minimum Wage in the U.S. and in Mississippi: A Simulation Approach


We estimate a calibrated labor market model that we created specifically to analyze the effects of a $15 minimum wage. We take into account how workers, businesses, and consumers are affected and respond to such a policy and we integrate their responses in a unified manner. In doing so, we draw upon modern economic analyses of labor and product markets. As we explain in the report, the main effects of minimum wages are made up of substitution, scale, and income effects. Our estimates compare employment numbers if policy were adopted to employment numbers if the policy had not been adopted. Other factors that may affect employment by 2024 are therefore outside the scope of our analysis.

Our analysis incorporates recent laws that raised state minimum wages, such as in New York State and California. However, we ignore laws that raise minimum wages at the city level. We do so to simplify the presentation. We pay special attention to Mississippi because it is one of the lowest-wage states in the U.S. 

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