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Raise Minimum Wage and Help (Not Hurt) Youth Employment

Libertarians insist that raising the minimum wage will cost jobs, but the actual data from places that increased minimum wage show otherwise: In practice, increasing the minimum wage has either helped or had no effect on the unemployment rate. Since minimum-wage workers are disproportionately youth, increasing the pay for their jobs makes minimum-wage jobs more attractive for other youth.

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Most minimum wage jobs are local service jobs in places like restaurants, hotels and cleaning services -- and can neither be exported to lower-wage areas nor cut. And the current low minimum wage does not cause more employees to be hired that would orgeewise not be hired if wages were higher.

For example, the current very cheap salaries of waiters, well below minimum wage since their real salaries come from customers' tips and not their employers, does not mean that restaurants have responded by overemploying waiters to ensure, say, that there is one waiter per customer. Rather, companies hire minimum-wage workers to their needs, no more, no less. Someone has to cook the food, bring it to the table and clean the floors and bathrooms. And that someone is, on average and in comparison to the age breakdown of the general population, disproportionately young. Raising the minimum wage, therfore, disproportionately provides a positive effect for youth and makes minimum-wage jobs more attractive for youth. 

U.S. states with a higher minimum wage provide provide the case studies. In Califfornia, for example, researchers at UC-Berkeley, in examining employment in border regions between states, found that a higher minimum wage does not lead to job loss. Further, UC-Berkeley researchers also found that a higher minimum wage led to employers being better able to attract and retain workers. 

If we want to increase youth employment in the country, one of the best things we can do is increase the minimum wage. 
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Attachments (2)

UCB-MinimumWage-Study1.pdf

"Minimum Wage Shocks, Employment Flows and Labor Market Frictions"

UCB-MinimumWage-Study2.pdf

"Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties"

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Photo of Steve Kube

It would be a smart move.

Spam
Photo of David

Thanks Steve!