Minimum wage increases increase the likelihood that low-skilled workers in automatable jobs become unemployed

People Versus Machines: The Impact of Minimum Wages on Automatable Jobs. Grace Lordan and David Neumark. NBER Working Paper, August 2017, http://www.nber.org/papers/w23667

Abstract: We study the effect of minimum wage increases on employment in automatable jobs – jobs in which employers may find it easier to substitute machines for people – focusing on low-skilled workers from whom such substitution may be spurred by minimum wage increases. Based on CPS data from 1980-2015, we find that ***increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become unemployed***. The average effects mask significant heterogeneity by industry and demographic group, including substantive adverse effects for older, low-skilled workers in manufacturing. The findings imply that ***groups often ignored in the minimum wage literature are in fact quite vulnerable to employment changes and job loss because of automation following a minimum wage increase.***