People Versus Machines: The Impact of Minimum Wages on Automatable Jobs
We study the effect of minimum wage increases on employment in automatable jobs – jobs in which employers may find it easier to substitute machines for people – focusing on low-skilled workers for whom such substitution may be spurred by minimum wage increases. Based on CPS data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become nonemployed or employed in worse jobs. The average effects mask significant heterogeneity by industry and demographic group, including substantive adverse effects for older, low-skilled workers in manufacturing. We also find some evidence that the same changes improve job opportunities for higher-skilled workers. The findings imply that groups often ignored in the minimum wage literature are in fact quite vulnerable to employment changes and job loss because of automation following a minimum wage increase.
We are grateful to John Addison and Jonathan Meer, as well as anonymous referees, for helpful suggestions. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
I have no sources of financial support for this research. I have received grants for other research on minimum wages from the Employment Policies Institute, as well as other foundations. These grants do not cover the topic of this paper, and this support never restricts my ability to publish the findings, nor gives the organization control over the conclusions I can disseminate.
Grace Lordan & David Neumark, 2018. "People Versus Machines: The Impact of Minimum Wages on Automatable Jobs," Labour Economics, . citation courtesy of