Does measurement error explain the increase in subminimum wage payment following minimum wage increases?

Does Wage Theft Vary by Demographic Group? Evidence from Minimum Wage Increases

“…Two additional studies, one focused on a set of 10 European countries (Goraus-Tańska and Lewandowski, 2019) and one focused on a set of 11 developing countries (Rani et al, 2013), find complementary evidence that subminimum wage payment is most prevalent when countries' minimum wage rates are high relative to average wage rates. 2 Clemens and Strain (2022b) provides evidence that the relationship between minimum wage increases and underpayment as measured in self-reported wage rates is unlikely to be driven by measurement error. increases in both wage gains and underpayment, such that the change in underpayment per dollar of wage gain is quite similar to what we observe for the non-Hispanic white population.…”

How important are minimum wage increases in increasing the wages of minimum wage workers?

“…2 2 For example, recent papers have studied the effect of minimum wage increases on worker health (Horn et al., 2017), “wage theft” (Clemens and Strain, 2022a, 2022b), job amenities (Clemens & Strain, 2020), and fringe benefits (Clemens et al., 2021; Dworsky et al., 2022). …”

“…Summary statistics in Appendix Table suggest that this specific issue accounts for roughly 25% of the cases in which a minimum wage worker does not report receiving a wage gain in the wake of a minimum wage increase. Third, as analyzed by Clemens and Strain (2022a, 2022b), some workers may fail to enjoy wage gains due to evasion or avoidance of minimum wage regulation. Clemens and Strain (2022a) find that increases in subminimum wage payment in the wake of minimum wage increases are roughly one‐sixth the size of realized wage gains.…”