July 30, 2025 11:00AM # Minimum Wage Increases Hurt Lower-Skilled Workers By [Jeffrey Miron](https://www.cato.org/people/jeffrey-miron) and Jacob Winter --- SHARE Listen to this article Generated with [ ElevenLabs](https://elevenlabs.io/) AI technology. Loading the [Elevenlabs Text to Speech](https://elevenlabs.io/text-to-speech) AudioNative Player... ![automation](/sites/cato.org/files/styles/pubs_2x/public/2025-07/automation%20mcdonalds.jpg?itok=lIU5TBpp) States and cities throughout the US continue to [raise](https://www.epi.org/minimum-wage-tracker/) their minimum wages, and some members of Congress are [pushing](https://democrats-edworkforce.house.gov/media/press-releases/04/08/2025/labor-leaders-introduce-bill-to-raise-minimum-wage) for a federal increase. There have long been [debates](https://www.cato.org/cato-handbook-policymakers/cato-handbook-policymakers-9th-edition-2022/minimum-wage), however, about whether these policies cause unemployment. A [recent study](https://www.cato.org/research-briefs-economic-policy/minimum-wage-automation) sheds new light on this question by examining > whether minimum wage increases in the United States expanded companies’ innovation in automation technology. The authors found > that a larger percentage increase in a state’s minimum wage led to a larger increase in the number of automation patent applications by firms headquartered in that state. Additionally, > \[a\]fter minimum wage hikes, a 10 percent increase in automation patents was associated with a 1.6 percentage point decline in the share of employment held by workers without any college education who performed routine tasks … and a 1.2 percentage point decline in the share of wages paid to these workers. The authors conclude by suggesting > that minimum wage increases make lower-skilled jobs more vulnerable to automation—harming the very workers legislators intended to help. More broadly, minimum wage hikes [generate](https://www.cato.org/policy-analysis/making-sense-minimum-wage-roadmap-navigating-recent-research) a range of counterproductive effects; good intentions are not enough. ##### Related Tags [Economics](https://www.cato.org/economics), [Libertarianism](https://www.cato.org/libertarianism) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).