Career progression and increases in labor demand rather than minimum wage increases appear to drive most wage gains for minimum wage workers

See How Important are Minimum Wage Increases in Increasing the Wages of Minimum Wage Workers by Jeffrey Clemens and Michael R. Strain. Clemens is at The University of California at San Diego and Strain is The American Enterprise Institute. Excerpts:

"Abstract 

"Popular discussion presumes minimum wage increases primarily drive wage gains for minimum wage workers. We investigate this presumption using the Current Population Survey to assess the fraction of minimum wage workers receiving raises after 12 months. This fraction is moderately higher following state minimum wage increases, and positively correlated with several measures of labor market tightness. Finally, wage gains frequently follow industry and/or occupation switches, highlighting the importance of career progression for earnings growth among entry-level workers. Career progression and increases in labor demand rather than minimum wage increases appear to drive most wage gains for minimum wage workers." 

"Our findings reveal that it is easy to overstate the minimum wage’s relevance as a source of low-wage workers’ wage gains, and that the qualitative thrust of this corner of the policy debate may be overemphasizing the importance of the wage floor. 14 We find that state minimum wage changes account for a modest fraction of the wage gains realized by minimum wage workers. Improvements in macroeconomic conditions and progression across occupations and industries appear to play a more significant role. 

We find that wage increases are the norm among minimum-wage workers, even in the absence of minimum wage increases. In a linear probability model, we find that minimum wage increases are associated with a 14.5 percentage point increase in the likelihood that a minimumwage workers gets a raise. Compared with the overall rates at which minimum wage workers receive wage gains, our estimates suggest that minimum wage increases accounted for around 18.7 percent of the wage gains that occurred during years in which minimum wage increases went into effect, and for around 8.6 percent of all wage gains realized by the minimum wage workers in our samples."