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Title: Why Do Labor Unions Advocate for Minimum Wage Increases?

Citation Type: Working Paper

Publication Year: 2023

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Abstract: Over the past decade, organized labor has played a significant role in advocating for minimum wage increases. Why might this be, given that the minimum wage may act as a substitute for the bargaining power offered by labor unions? In this paper, we study the interplay between minimum wages and union membership. We estimate that each dollar in minimum wage increase predicts a 5 percent increase (0.3 pp) in the union membership rate among individuals ages 16–40. Consistent with a classic “free-riding” hypothesis, however, we find that minimum wage increases predict declines in union membership among the minimum wage’s most direct beneficiaries. Instead, increases in union membership occur among much broader groups that are not directly affected by the minimum wage.

Url: https://docs.iza.org/dp16059.pdf

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Authors: Clemens, Jeffrey; Strain, Michael R

Series Title: IZA Institute of Labor Economics Discussion Paper Series

Publication Number: 16059

Institution: IZA – Institute of Labor Economics

Pages: 1-52

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Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Poverty and Welfare

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