Title:
Explaining Productivity-Wage Gap Divergence Through Minimum Wage Increase Events: A Frequency, Density, and Ratchet Analysis

Abstract:
This study examines whether minimum-wage increase events are associated with long-run expansion of the productivity-compensation gap. Using event-based, classification-based, frequency-based, density-based, and ratchet-based analyses, the study evaluates patterns across historical federal minimum-wage increases and contemporary state-level comparisons. Results indicate that minimum-wage increase events frequently occur during periods of wage-gap compression and are often followed by sustained productivity-compensation divergence. Comparisons with inflation trends suggest that inflation alone is insufficient to explain the observed expansion. Additional analysis shows event frequency, density, and classification are more strongly associated with the magnitude and persistence of divergence than the size of any individual increase. Ratchet analysis further indicates that divergence generated during earlier event periods is frequently retained and expanded following subsequent events. Historical and contemporary evidence consistently support these patterns. Overall, the findings are consistent with a cumulative divergence ratchet-like pressure in which recurring minimum-wage increase events are associated with progressively larger productivity-compensation gaps over time.

Working Paper Citation:
Nevin, B. (2026, August 17). Explaining Productivity-Wage Gap Divergence Through Minimum Wage Increase Events. Nevin Consultant Group. Retrieved from https://nevinconsultant.com/2026/08/17/explaining-productivity-wage-gap-divergence-through-minimum-wage-increase-events/