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…
May 1995
Two consistent themes have echoed throughout the current debate over the future of the minimum wage: minimum-wage workers today have been left behind by the overall growth in wages; and, mandated wage increases are desirable because most minimum wage workers are adults and have families to support. Both of these assertions are based on simplistic views of the workforce. Neither stands up to close scrutiny,…
February 1995
Raising the earnings of welfare recipients, primarily women attempting to move into the workforce, remains the chief obstacle in reforming the welfare system. One widely discussed option has been to raise the minimum wage. Advocates of higher minimum wages call for an increase in order to make work more attractive and create sufficient monetary incentive for individuals to leave the welfare system and move into…