Insight
April 15, 2015
AAF’s Minimum Wage Paper 1 Year Later: Why is it so Successful?
About one year ago, AAF Policy Analyst Ben Gitis authored a paper examining the minimum wage and its effect on jobs: “How Minimum Wage Increased Unemployment and Reduced Job Creation in 2013.” To the Forum’s delight, the paper was not only cited early and often, but it’s garnered a strong, staying power online: it still garners an average of nearly 1,000 views each week.
Its success has raised the question: why?
Now we at the Forum find topics like the correlation between an increased minimum wage & fewer jobs to be scintillating fodder, but it’s interesting to see that so many other Americans do too. And that’s for a few reasons.
First, Ben’s paper produced an important finding. He found that in 2013, a $1 increase in the minimum wage led to a 1.48 percentage point increase in unemployment, a .18 percentage point decrease in the net job growth rate, and a 4.67 percentage point increase in teen unemployment. It was an important dose of factual cold water on an increasingly popular populist position.
Second, the paper received a lot of attention that led to massive distribution. AAF’s research was first covered by FOX Business and The Daily Caller, and ultimately cited on 606 different websites. The finding became a primary reference point connecting resistance to a popular minimum wage argument to deep economic analysis.
Third, the paper was authored at the right time. The chart below from Google Trends displays the search interest (relative to the highest point in the chart) for “minimum wage” since 2004.
Interest in the minimum wage as a web query peaked in January 2014 when the president announced an executive order raising the minimum wage for federal contract workers, and making the issue a central part of the national public policy debate. A month later, Connecticut raised their minimum wage. The Forum’s research showed that states that did so in 2013 saw increased unemployment.
For every subsequent state that proposed a minimum wage hike, there was research showing its negative economic effects.
And the Internet ate it up.
Google Search uses PageRank to determine the importance of a web page, which was the first (and still best-known) algorithm used to order search results. It measures importance by the number and quality of links to a page. The 606 links to the study showed Google that this study mattered. Since then, nearly 80% of the paper’s traffic has come from Google Search.
In the last three months alone, it has been viewed in 43,036 Google Search results, garnering 5,834 clicks at a rate of 14%. Google “negative effects of raising the minimum wage” and you’ll see it there.
One year later, the perfect match of solid research, broad distribution and pickup, and good timing have created a paper with staying power. And fortunately, many Americans know now that if you increase the minimum wage, it has real negative effects on the economy.