ERIC Number: ED383927
Record Type: RIE
Publication Date: 1995-Jan
Minimum Wage Laws and the Distribution of Employment.
The desirability of raising the minimum wage long revolved around just one question: the effect of higher minimum wages on the overall level of employment. An even more critical effect of the minimum wage rests on the composition of employment--who gets the minimum wage job. An examination of employment in eating and drinking establishments (including fast food, table service restaurants and cafeterias) shows that the effect of higher minimum wages in the late 1980s was to displace adults employed in food service in favor of younger workers. The analysis exploited the differences in state-level minimum wages that arose in the late 1980s, a period in which many states raised their minimums while the federal minimum remained constant. When the federal minimum wage rose in 1990-91, its effect on wages was stronger in states that had lower wages. This disparity in minimum wage effects made it possible to estimate interstate differences in employment composition: the displacement effect on older workers from the federal increase was greater in lower-wage states. The greater the effect the minimum wage increase had on wages, the larger was the resulting displacement of older workers. (An appendix includes information on how minimum wage changes can lead to worker displacement.) (YLB)
Descriptors: Adult Education, Career Education, Dislocated Workers, Employment Patterns, Employment Practices, Minimum Wage, Secondary Education, Student Employment, Unemployment, Vocational Education, Wages, Youth Employment, Youth Problems
Employment Policies Institute Foundation, Suite 1110, 607 14th Street, N.W., Washington, DC 20005.
Publication Type: Reports - Research
Education Level: N/A
Authoring Institution: Employment Policies Inst., Washington, DC.