In Minimum Wages, David Nuemark and William Wascher present an impressive review of their own research on the minimum wage that spans nearly 30 publications. Undoubtedly, they have shown steadfast commitment to the study of this issue, and have written an accessible book detailing their conclusions about the policy's effects on employment, wages, income, skills and prices. Right from the start, the authors are clear where they stand. They conclude that minimum wages (1) ‘reduce employment opportunities for less-skilled workers’; (2) ‘reduce rather than increase the earnings of the lowest-skilled individuals’; (3) ‘do not, on net, reduce poverty’ and ‘primarily redistribute income among low-income families’; and (4) ‘appear to have adverse longer-run effects on wages and earnings, in part because they hinder the acquisition of human capital’ (pp. 6–7). (In light of the authors’ honesty, the reviewer feels he should reveal he has advocated for minimum wage increases in the past.)

While the authors should be commended for clearly stating their conclusions, their position makes it unclear whether they are well suited to provide ‘a comprehensive discussion of other research’ (p. 4) on the minimum wage, as they seek to do in this book. It is unsurprising that they find their own and similar studies to be the most persuasive. As a synthesis of recent research, the book might have proven more successful had it included responses from some of the researchers whom they vigorously critique. Still, Minimum Wages is highly useful as a summary of the work of two important contributors to the field, and their views on the work of others.

Chapter 2 offers an interesting political and legislative history of the minimum wage in the United States, and further describes the historical debate about its economic effects. The chapter impresses upon the reader the extent to which the key issues up for debate have remained largely the same for nearly a century. The chapter also illustrates how the minimum wage began as a state issue in the US, rose to the federal level, and has increasingly returned to the state and local levels. The authors think this is good news for researchers, as the greater degree of state variation allows for more robust empirical strategies.

Chapter 3 explores recent research on the effects of the minimum wage on employment. It starts with a detailed discussion of the theoretical basis for predicted employment effects of the minimum wage made by the neoclassical model and monopsony models. These models are straightforward, but are often oversimplified, and so the authors’ review is helpful. They go on to review what they consider to be the most compelling recent research on this topic, with a focus on their own work. At times, the chapter text is unclear that most of these studies are limited to teens or youth, although table 3.1 highlights this. While the chapter is − like the book − focused on research from the United States, the authors examine evidence from other countries as well. In the end, most of these studies show modest negative employment effects for teenagers and youth, with some outliers in both directions. A further important finding is that increases in minimum wages may have an effect on hours of work rather than on total employment. Employers may reduce the hours of their less-skilled employees instead of (or in addition to) reducing their workforce. The authors argue this outcome may be the most important for ‘testing the validity of the competitive model of labor demand’ (p. 78), and so deserves more attention in future research.

Chapter 4 considers wage and earnings distributions. The chapter concludes that ‘the minimum wage raises wages of the lowest-skilled workers and creates a spike in the wage distribution’ (p. 115), and acts to reduce wage inequality. However, in Chapter 5 Nuemark and Wascher conclude − based almost entirely on their own work − that this does not translate into higher family incomes for the poor because the policy results in a ‘redistribution of income among low-income families’ (p. 189), with some gaining and some losing. Given how few studies find this result, this conclusion may be overstated.

Chapter 6 examines the effects of minimum wages on the skills of affected workers, finding ‘some evidence of negative effects’ on the development of human capital among less-skilled workers (p. 223). Finally, Chapter 7 finds some evidence that increases in the minimum wage lead to increases in the prices of goods produced by low-wage workers, although they find no evidence of wider inflationary effects. The research in this chapter is the least robust of any of the empirical chapters. Both chapters, however, are commendable for exploring outcomes that have received less attention, but are arguably just as important as those previously discussed.

Finally, the authors move out of their typical econometric analyses in Chapter 8 to consider the political economy of the minimum wage. While the minimum wage is overwhelmingly popular among the public (which the authors speculate is because most people are uninformed about the policy's negative effects), it is not a priority issue for most voters. The authors further note that certain groups may have self-interested – and perhaps even malevolent – economic incentives for supporting minimum wage increases. Labor unions, for example, may benefit if firms substitute high-skilled workers (who are more likely to be union members) for less-skilled workers in response to minimum wage increases. However, the authors offer no proof that these groups are acting on these incentives when they support of the minimum wage.

Nuemark and Wascher have committed more time and thought to the study of the minimum wage than perhaps any other economist, and so their work is an important addition to the library of any policy analyst interested in the subject. Minimum Wages offers a highly useful synthesis of their vast body of work. However, readers should be clear that these respected scholars come to conclusions that are on the extreme end of those familiar with this body of research. Thus, the reviewer suggests balancing this perspective with other rigorous sources.