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Los Angeles Mayor Eric Garcetti, center, joins members of the City Council and community leaders in June 2015 after signing into law an ordinance that will gradually raise the minimum wage to $15 an hour by 2020. (Ringo H.W. Chiu/The Associated Press)

Houston — Elected officials in a number of cities across the United States have approved increases to the local minimum wage in an effort to improve the well-being of low-income workers and families. In some communities, the minimum wage will increase by more than $5 an hour. Yet, not much is known about the impact of such sizable increases. The existing research does not provide a comprehensive picture of how the effects of these increases will be spread across individuals and households, and how they will vary across industries, neighborhoods, and geographic areas.

The recent policy changes present a unique opportunity to study whether a higher minimum wage can promote economic opportunity and contribute to the long-term financial stability of workers, families, and communities. As such, the Laura and John Arnold Foundation (LJAF) is funding research projects that will evaluate the impact of higher minimum wage ordinances in three major U.S. cities:

  • Researchers at the University of California, Los Angeles will study the effects of the minimum wage increase in Los Angeles. The minimum wage is set to increase from $9 to $10.50 an hour in July of next year. It will reach $15 an hour by 2020.
  • Researchers at the University of Washington will study the effects of newly implemented wage increases in Seattle and Chicago. In Seattle, the minimum wage increased from $9.47 to $11 an hour in April. It will reach $15 an hour by 2018 for certain employers. In Chicago, the minimum wage increased from $8.25 to $10 an hour in July. It will reach $13 an hour by 2019.

In all three projects, researchers will study:

  • Groups of workers to assess whether the higher minimum wage produces significant benefits in areas such as health, food security, and overall earnings;
  • Businesses to analyze any changes in employment levels and operations; and
  • Low-income neighborhoods to determine the effects of residents’ increased spending power.

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

The research studies will be conducted over three years. Final results will be released in the winter of 2018.

In addition, LJAF is interested in studying minimum wage increases in other areas of the country. For more information, please see this Request for Proposals.