Michigan is raising its minimum wage gradually until it reaches $15 by 2027. What many people don’t know is how few workers earn the minimum wage. Nationally, roughly 55% of workers are paid hourly, and of those just 1.1% are paid at or below the federal minimum wage of $7.25 per hour. Michigan’s minimum wage is $13.73 per hour. Increasing the minimum wage will disproportionately affect different groups, according to recent economic research.

A new study analyzes the impact of minimum wage hikes on different racial groups in America. The authors look at the effect on African Americans and non-Hispanic whites from 2005 to 2019. They find that black workers were impacted more than white ones, with larger effects for men.

One reason for this could be that most workers earning the minimum wage are younger, and blacks in America are younger than whites on average. However, the researchers control for age. Even when this is done, higher minimum wages lead to more unemployment among blacks. In their conclusion, the authors quote Milton Friedman, who said that minimum wage laws are “the most anti-Negro law on our statute books.” This new paper is consistent with what Friedman predicted back in the 1960s.

Another recent paper studied what happens to the disabled when the minimum wage increases. The authors analyzed this group, who comprise roughly one-eighth of the labor force, during the 2010s. This study found the typical effect that large minimum wage increases impact younger workers overall more than adults. For the disabled, the authors found that small changes to the mandated wage had no effect. But large increases led to about a 3% lower employment rate among the disabled.

A paper published this year looks at college students from a Washington state university. Many students find summer work, and higher minimum wages could hamper their ability to find jobs. The authors gather individual data from the university and the state of Washington. Combining these sources allowed the authors to analyze the work history of students individually. Looking at the years from 2013 to 2019, they find that jumps in the minimum wage lowered employment for students, especially those with little work experience or those from out of town.

A 2024 paper looked at accident rates and the minimum wage. If firms have a fixed amount of money to spend on production, labor cost increases might lead to lower spending on safety. The authors studied state-level minimum wage increases greater than $1 from 2002 to 2011. They found that such wage hikes led to about 4.5% more workplace accidents, with a larger effect for more cash-constrained firms. Findings like these raise the question of whether workers are automatically better off when the government forces businesses to pay them more.

The number of people impacted by the proposed minimum wage hike in Michigan will most likely be minuscule. However, based on research from the past couple of years, we can make some predictions. Black workers, the disabled and college students with little work experience will probably see the largest effects. They will have a harder time finding jobs.

Thomas Sowell has said, “There are no solutions; there are only trade-offs.” In considering an increase to the minimum wage, it is important to look beyond the immediate impact of higher wages and to recognize the unintended consequences of forcing employers to pay more for hourly work.

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