UCLA Receives $570,000 Grant

UCLA Anderson to lead study monitoring the effects of a higher minimum wage in Los Angeles

The Regents of the University of California received a $570,000 grant to conduct a study that will evaluate the effects of the higher minimum wage ordinance in the Los Angeles metropolitan region. The research initiative will be led by Edward Leamer, UCLA Anderson School of Management Distinguished Professor, Chauncey J. Medberry Chair in Management and UCLA Anderson Forecast director. Leamer will collaborate with Drs. Till von Wachter and Frederick Zimmerman, faculty members from the Department of Economics and School of Public Health at UCLA, and Jerry Nickelsburg of UCLA Anderson School.

While increases in minimum wages are occurring in many locations, the Los Angeles experiment could be one of the most informative, since the city has an unusually large share of geographically-concentrated low-wage workers, and the legislated increases in the minimum wage are projected to cover a greater fraction of workers here than in any other jurisdiction, and there are abundant locations near the City where jobs might go. The research will study the impact of the local minimum wage increase on a broad set of effects, including wage and employment levels but also product prices and health outcomes.

“City governments are currently pushing minimum wages up significantly, based on the expectation that every increment to the minimum wage is favorable,” notes Leamer. “But the higher the level of the minimum wage, the greater is the risk of adverse employment effects, and our goal is to track the impacts over time so that the City of Los Angeles can be fully aware of both the favorable and unfavorable effects.”

“As the City of Los Angeles passed its historic minimum wage increase, Dr. Leamer and Dr. Nickelsburg from the UCLA Anderson Forecast worked closely with me to create a simple way of informing the City Council regarding the effects of any increase on both earnings and employment. I am enthusiastic for the research and analysis this grant will provide to inform policy makers of the impacts to the local economy to ensure the increased minimum wage achieves the goal of raising families out of poverty,” says Los Angeles City Councilmember Bob Blumenfield.

Funding for the study was provided by a grant from the Laura and John Arnold Foundation (LJAF), which is focused on addressing some of the nation’s most persistent challenges through the use of research and evidence.

“In order to design sound social policies that drive meaningful, lasting improvements in people’s lives, decision makers must have reliable information about various approaches,” explained LJAF Vice President Josh McGee. “This study will allow us to learn as much as possible about how minimum wage increases affect low-income workers and their families.”

The study will be conducted during a three-year period. Findings will be released in the winter of 2018.

Read the full press release