July 1996
The desirability of raising the minimum wage has long revolved around just one question: the effect of higher minimum wages on the overall level of employment. This report adds an important new dimension to that debate by showing that an even more critical effect of the minimum wage rests on the composition of employment — who gets the minimum wage job.
Kevin Lang’s paper focuses…
May 1996
The vast majority of economists agree that minimum wage hikes create a tradeoff: lost jobs for some, but increased benefits for others. Recent research has investigated the losers in this tradeoff by examining the composition of job loss. After an increase, minority teens, welfare mothers, and other low-skilled adults are displaced from the workforce by middle-class teenagers who are lured to jobs by the higher…
April 1996
Economists have long believed that raising the minimum wage results in fewer entry-level employment opportunities and displaces the least skilled from the job market. In recent months, proponents of a higher minimum wage have returned to one study which they claim shows the opposite — that higher minimum wages do not reduce, and may even increase, employment. The New Jersey fast food study, conducted by…
October 1995
As Drs. Daniel Hamermesh and David Scoones point out in their paper, the steady erosion in the share of wages subject to taxation to fund the unemployment insurance (UI) system as led to an increased burden on low-skilled, and therefore low wage, workers: today only 1/3 of all wages are taxed to fund the UI system. Although the unemployment insurance system is nominally structured to…
August 1995
To assess the desirability of higher minimum wages we typically focus on aggregate employment effects — how much a particular increase would lower overall employment. The current views on this question range from no job loss (according to the Clinton Administration) to a loss perhaps as high as 3 percent for teens (the workers most affected by the minimum wage) for every 10 percent increase…
June 1995
It is no secret that the hospitality industry (restaurants and hotels) provides valuable opportunities to inexperienced workers, especially those seeking additional formal education. More than one in every five “first paid jobs” is in the hospitality sector. More than 40% of all youth employed in the 1980s had held at least one job in the hospitality industry. In the present study, Bradley Schiller of American…