The authors say firms that face higher wages may respond by raising prices on goods and services. They also estimate that higher prices would offset the income gains for minimum-wage workers and reduce the real income of non-minimum-wage workers who did not get a wage increase. The article adds that the distributional impact could fall on non-minimum-wage households, including middle-income households, through higher consumer prices.

The report uses an input-output model to analyze price pass-through from minimum wage increases to food and food-service prices. It finds that a $0.50 increase in the minimum wage would raise food prices by less than 1 percent for most food categories and about 1 percent for eating and drinking places under full-cost pass-through.

We develop a framework with rich worker heterogeneity, firm monopsony power, and putty-clay technology to study the distributional impact of the minimum wage in the short and long run. We find that in the short run, a large increase in the minimum wage has a small effect on employment and therefore increases the labor income of the workers who were earning less than the new minimum wage. In the long run, however, the minimum wage has perverse distributional implications in that it reduces the employment, income, and welfare of precisely the low-income workers it is meant to help. But combining existing programs with a modest increase in the minimum wage generates even larger welfare gains for low-earning workers.

We estimate the effects of federal and state minimum wage changes on the distribution of family incomes. Our baseline estimates indicate that minimum wage increases raise the incomes of families in the bottom part of the income distribution and reduce the share of families with incomes below the poverty line. We find little evidence that minimum wage increases reduce incomes for families in the middle of the distribution; estimated effects for families above the median are close to zero and statistically insignificant.

Discussing downstream effects of minimum wage hikes, the authors note that in child care, "as centers adjust to increased minimum wage rates, they may pass some of the cost to consumers in the form of tuition increases." They highlight that such tuition hikes can "strain family budgets" and may be particularly challenging for families that do not qualify for subsidies but "are not affluent," suggesting potential pressure on middle-income households who face higher prices without offsetting assistance.

An IMF blog summarizing cross-country evidence on minimum wages notes that higher minimum wages can produce "some price increases" as firms pass higher labor costs on to consumers. It adds that these price effects "tend to be small on average," but that they are "more likely to be felt by consumers of goods and services produced with a large share of low-wage labor," implying that households across the income distribution—including middle-income families—face higher costs for such items.

Using French data, we assess the impact of the minimum wage on employment and the earnings distribution. We find that increases in the minimum wage raise wages at the bottom of the distribution but are associated with some job losses among low-skilled workers. The impact on the middle of the income distribution mainly operates through higher consumer prices, which are borne broadly by all households; however, the estimated effects on middle-income households’ real disposable income are small.

In my new paper, I use individual-level data between 1984 and 2013 from the Current Population Survey by the U.S. Census Bureau to provide a thorough assessment of how U.S. minimum wage policies have affected the distribution of family incomes. Overall, I find robust evidence that higher minimum wages lead to increases in incomes among families at the bottom of the income distribution and that these wages reduce the poverty rate. The expected price increase from raising the federal minimum wage to $12 per hour would be less than 1 percent. Therefore, netting out any price increases does not substantially affect the real income gains for the bottom quarter of the income distribution. Price increases do mean, however, that a sizeable portion of these income gains at the bottom are likely to be borne by middle- and upper-income consumers through small increases in prices.

We find that in the short run, a large increase in the minimum wage has a small effect on employment and therefore increases the labor income of the workers who were earning less than the new minimum wage. In the long run, however, the minimum wage has perverse distributional implications in that it reduces the employment, income, and welfare of precisely the low-income workers it is meant to help. Our quantitative analysis shows that the minimum wage creates winners and losers, and that the distributional impacts depend on the time horizon considered and the degree of worker heterogeneity and firm monopsony power.

The institute summarizes newer research finding that the pass-through effect on prices is much smaller than previously thought and often fleeting. It reports that restaurant prices rose by only 0.36 percent for every 10 percent increase in the minimum wage, suggesting limited consumer-price effects in many settings.

We use distributional regression analysis to study the impact of a six percent increase in the Irish minimum wage on the distribution of hourly wages and household income. Wage inequality, measured by the ratio of wages in the 90th and 10th percentiles and the 75th and 25th percentiles, decreased by approximately eight percent and four percent respectively. Our results indicate that the minimum wage increase had very little impact on the gross household income distribution. We find that minimum wage workers, rather than being heavily concentrated in low income households, are spread throughout the income distribution, often in high income households. Furthermore, minimum wage workers are typically not the primary earner within households. These factors will limit the effects of a minimum wage increase on household income.

This paper uses linked survey and administrative data to examine how minimum wage policies affect the distribution of household income. Moreover, income volatility is high in the region of the distribution likely to be affected by the minimum wage, so changes in the dollar values of income at specific points of the distribution should be interpreted cautiously. We find that the minimum wage increases considered in our analysis raise earnings for many low-wage workers, but that the resulting changes in household income are more muted and heterogeneous. In particular, the income gains tend to be concentrated among households in the lower half of the income distribution, though not exclusively among the very poorest households.

The paper notes that a lower labor share, together with additional costs associated with minimum wages, would imply less than full pass-through of minimum-wage increases into consumer prices. This supports the idea that price effects can occur, but not necessarily one-for-one.

To summarize, we find that 17 percent of workers whose wages were affected by the most recent increases in the federal minimum wage live in families with incomes below the poverty line, while 34 percent live in families with incomes more than twice the poverty line. Overall, the net effect of the increases in the minimum wage on the distribution of family incomes is small. We also find that the minimum wage is a relatively blunt instrument for redistributing income to poor families, since a substantial share of the benefits accrue to non-poor families. The incidence of the costs of minimum wage increases, including potential price increases and reduced profits, is likely to fall on consumers and business owners throughout the income distribution.

The article states that research on minimum wages suggests modest and mixed economic effects. It notes that decreases in employment can offset, partly or fully, wage increases, which is relevant to claims about distributional consequences for households at different income levels.

This paper develops and estimates a spatial general equilibrium job search model to study the effects of local and universal (federal) minimum wage policies on regional labor markets and the distribution of welfare. We show that local minimum wage hikes can have non-trivial spillover effects on other regions through migration and commuting decisions. Our simulations indicate that while low-wage workers in high-minimum-wage regions often gain, some of the costs are shifted to consumers and business owners via higher prices and lower firm profits. The net welfare consequences vary across the income distribution, with higher-income households bearing a disproportionate share of the incidence of increased consumer prices.

The paper says it is well established in the international literature that minimum wage increases compress the wage distribution and that firms respond to higher labor costs. It is relevant as evidence that some cost pass-through to prices is a standard mechanism discussed in the literature.

Multiple studies conclude that total annual incomes of families at the bottom of the income distribution rise significantly after a minimum wage increase. High-quality academic scholarship confirms that modest increases in the minimum wage have not led to detectable job losses. A $17 minimum wage would begin to reverse decades of growing pay inequality between the most underpaid workers and workers receiving close to the median wage, particularly along gender and racial lines.

Summarizing research on wage and price effects, the brief notes that while higher minimum wages raise incomes for low-wage workers, concerns about inflationary pass-through are often overstated. It states that "studies of previous minimum wage increases show minimal increase in cost of goods and services," implying that any added financial burden on consumers, including middle-income families, from higher prices tends to be small compared with the income gains to low-wage households.

Discussing interactions between minimum wage hikes and means-tested benefits, the article notes that "raising wages alone may cause many poor families to actually end up with less money in their pockets" because programs such as SNAP, EITC, housing, childcare, and health subsidies "have income-threshold eligibility." It highlights research showing that marginal tax rates "for full-time workers increase to as much as 60 percent for those moving to the $12 and $15 level," and argues that without adjustments to benefit thresholds, some families near or modestly above poverty can face net financial strain when wages rise.

In standard labor economics, the incidence of a minimum wage hike can fall partly on consumers through higher prices, and partly on employers, workers, or some combination depending on market conditions. Empirical studies often find small to moderate price pass-through in low-wage, labor-intensive sectors such as restaurants.

The article discusses the claim that minimum wages stimulate consumer spending and notes the opposing view that higher labor costs can be passed on to consumers through higher prices. It is a secondary commentary source and is less authoritative than the primary research cited above.