Higher Minimum Wages Lead to Teen Dropouts, Criminals

Posted on May 06, 2010

Teens will have a tough time finding a job this summer, and one often overlooked reason are wage mandates that create a barrier between teens who want to work, and employers who want to hire.

Between July 2007 and July 2009, Congress increased the federal minimum wage 40 percent. Recent research from Ball State University attributes the loss of 310,000 teenage part-time jobs to this wage hike. And states like Massachusetts mandate a minimum wage even higher than the federal.

Minimum wages raise the cost of hiring and training entry-level employees like teens. Employers respond by cutting staff hours or positions and, over time, are forced to replace “full-service” positions with “self-service” and “automated.”

These unemployed teens are deprived of the valuable “invisible curriculum” that comes from reporting to a supervisor, showing up on time, and working with others as part of a team. Research from Northeastern University found that teens without job opportunities — especially economically disadvantaged teens — are also more likely to drop out of high school or get tangled up in the criminal justice system.

Michael Saltsman
Research Fellow
Employment Policies Institute
Washington, DC