Do Minimum Wage Hikes Exacerbate Racial Differences in Hiring?
Early Career Research Grant
We investigate the effect of increasing the minimum wage on labor market racial disparities using an audit study. Racial differences are measured by comparing the rate at which firms respond to fictitious job applicants with distinctly White and Black names. We applied to jobs before and after Arkansas and Missouri increased their minimum wages in January of 2019 and Illinois in 2020. Similar to past work, job applicants with distinctly Black names are 3 percentage points (17%) less likely to receive a callback than applicants with distinctly White names. However, we find that the Black-White callback gap shrinks by about 2 percentage points (70%) after the minimum wage increases.