Does Wage Theft Vary by Demographic Group? Evidence from Minimum Wage Increases
Using Current Population Survey data, we assess whether and to what extent the burden of wage theft — wage payments below the statutory minimum wage — falls disproportionately on various demographic groups following minimum wage increases. For most racial and ethnic groups at most ages we find that underpayment rises similarly as a fraction of realized wage gains in the wake of minimum wage increases. We also present evidence that the burden of underpayment falls disproportionately on relatively young African American workers and that underpayment increases more for Hispanic workers among the full working-age population.
We thank Duncan Hobbs for excellent research assistance. Clemens thanks the Hoover Institution, where he is an Adjunct Senior Fellow during the 2023-2024 academic year. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.