Q&A: UCLA professor talks new study on LA’s minimum wage increase
Dr. Edward Learner, chair of management at the UCLA Anderson School of Management, will lead an Anderson team in a three-year-long research project to study the effects of raising the minimum wage in Los Angeles over the next five years. (Anisha Joshi/Daily Bruin)
By Elisa Lee
Nov. 25, 2015 3:30 a.m.
A research foundation granted UCLA professors $570,000 to study the effects of raising the minimum wage in Los Angeles over the next five years.
The team will study changes in wage and employment, product prices and health. Dr. Edward Leamer, chair in management at the UCLA Anderson School of Management, will lead the Anderson team in the three-year-long research project.
The Daily Bruin’s Elisa Lee spoke to Leamer about the benefits and drawbacks of raising minimum wage, and which industries will be most affected. Leamer serves as the director of the UCLA Anderson Forecast, which provides data on the California and the U.S. economy. He received a doctoral degree in economics from the University of Michigan in 1970.
Daily Bruin: What will the first part of the research study entail?
Edward Leamer: (Undergraduate and graduate) UCLA students will go out to 1,000 self-serve restaurants this month to compare the prices of food before and after the increase of minimum wage.
DB: What is the main hypothesis of this study?
EL: (We predict) there will be some job loss. There will be an increase in compensation for some workers and some job loss – the question is how much of each. Several states that had an increase in their minimum wage due to federal changes in the minimum wage saw a 1 percent job loss, but that employment effect is a subject of great dispute among economists. Our goal is to inform policymakers of the likely consequences of raising minimum wage.
DB: What are the main concerns with increasing the minimum wage?
EL: The intent (of raising minimum wage) is to improve the welfare and living standards of poor neighborhoods, but the concern is that (the intent) will not be an actuality. One of the concerns is more people will want to work and make it harder for the working class to find available jobs along with other undesirable effects.
DB: What might be some of the benefits and drawbacks of increasing minimum wage?
EL: The ideal story is that neighborhoods will be better off by increasing the earnings of relatively low-paid workers. We want to know what can be done to help these folks out. (A drawback) is job loss, especially in (self-service) restaurants, health care, and retail businesses that pay minimum wage. There is also concern these businesses will be adversely affected when they pass cost onto customers in the form of higher prices, because these customers aren’t wealthy either. There may be no positive effect. Raising minimum wage is a temporary response that may or may not work.
DB: How do you think increasing the minimum wage will affect UCLA?
EL: Thirty- to 40-year-olds, many of them immigrants who work full-time, are going to be the target of this study. Some UCLA workers may have family members who work minimum wage jobs, which can mean more family income or lost jobs – we don’t know which. If the quality of living improves from increasing minimum wage, UCLA may get more applicants who can afford to come to UCLA.
Compiled by Elisa Lee, Bruin contributor.
