Minimum wages and racial inequality
This project will research how effective basic and universal labor standards are at reducing group inequality by looking at a major amendment to the Fair Labor Standards Act in 1966, which extended federal minimum wage coverage to several new industries. The expansion occurred at a time when the federal minimum wage was 40 percent higher in real terms than it is today. The newly covered industries were concentrated in services, retail, and agriculture, sectors with disproportionately high shares of women and black workers. The project proposes to take advantage of the scale of the reform and the racial and gender composition of treated industries to test the effects of high minimum wages and their ability to close the gender and racial wage gaps. This research promises to increase our understanding of the effects of introducing a high wage floor and whether universal federal labor standards can effectively reduce the racial and gender wage gaps.