There is new evidence that raising the minimum wage pushes business owners to replace low-skilled workers with automation. And it shows that old, young, female and black low-skilled workers face the highest levels of unemployment after a minimum-wage increase.
Economists Grace Lordan of the London School of Economics and David Neumark of UC Irvine studied 35 years of government census data for their working paper, which was released in August, titled "People Versus Machines: The Impact of Minimum Wages on Automatable Jobs."
"Based on [current population survey] data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers," the study says.
These automatable jobs include positions like supermarket check-out clerks, who can be replaced by self-service checkout cashiers, and assembly-line workers in manufacturing plants, who can be replaced by robotic arms. Low-skilled workers, for the study, are defined as those who have a high school diploma or less.
"We find that a significant number of individuals who were previously in automatable employment are unemployed in the period following a minimum wage increase," the study says.
And while most minimum-wage research focuses on teenagers, this study looks at the influence raising the minimum wage has on many other populations. "These effects are among the largest for individuals employed in the manufacturing industry, and are larger for the oldest and youngest workers, for females and for blacks."
Raising the minimum wage is a deeply polarizing issue. While some argue raising the minimum wage squeezes businesses, forcing them to lay off workers, others argue it is beneficial for both individual workers and the economy as a whole.