Workplace Injuries in Low-Wage California Industries
ABSTRACT:
This project will contribute to a scant literature on how minimum wages affect workplace injuries. It will use recent improvements in causal identification methods to examine the effects of California’s high minimum wages, which in 2024 reached $16 per hour statewide and $20 in much of the state’s fast-food sector. This new approach to studying workplace injuries recognizes that workplace injury rates have risen in the past decades, reversing 37 years of improvements in worker safety. A substantial part of this increase involves low-wage service industries, such as warehouses, retail and restaurants. We will address a series of questions: Are injury rates higher when wages are lower? Might minimum wages unintendedly increase workplace injuries? Or do they help prevent an even faster increase? We propose addressing these questions by studying the effect of minimum wages on workplace injuries in California. To do so, we will use a universe of injury compensation claims provided by the California Department of Industrial Relations and exploit variation in county and city-wide variation in minimum wages. We will employ a difference-in-difference event study method to obtain causal estimates of such policies. Our initial focus will be on warehouses, retail and restaurants. Workers in these industries are especially affected by minimum wage increases and are susceptible to traumatic injuries because of the type of work they perform. We will also deploy synthetic control methods using state-level minimum wage differences and state-level data on workplace injuries. This study will thus inform policies to reduce workers’ injuries.