by Jon Guze
Senior Fellow, Legal Studies, John Locke Foundation
In a new article at the Journal of Public Economics, Zachary S. Fone, Joseph J. Sabia, and Resul Cesur report, “Using data from the 1998–2016 Uniform Crime Reports and a difference-in-differences approach, we find robust evidence that minimum wage hikes increase property crime arrests among 16-to-24-year-olds.”
Why would that be? The authors speculate that it’s because “among those at the margin … criminal behavior has been found to be negatively related to employment,” and because “minimum wage increases cause non-trivial employment or hours declines among low-skilled workers.”
That does, indeed, seem to be the most likely reason, but to some extent it doesn’t matter. Near the end of the article the authors estimate that, “A $15 Federal minimum wage … could generate median criminal externality costs of approximately $766 million.” That would be reason enough not to raise the minimum wage. For reasons explained here, however, if it were to happen, most of those costs will be borne by the poor, which would make it even worse. Those who still support a $15 minimum wage should ask themselves, “Do I really want to inflict this much harm on America’s poorest citizens?”
Hat Tip: criminal justice expert extraordinaire, Jennifer Doleac.