When a state increases the minimum wage, younger workers stand to absorb the negative consequences.
When minimum wages increased between 2006 and 2012, workers between ages 16 and 30 with less than a high-school education had their employment rate reduced by 5.6 percent, according to a National Bureau of Economic Research working paper.
The negative effects of the minimum wage disproportionately fall on the young and the low-skilled or low-educated.
That isn’t so surprising, as minimum-wage workers under the age of 25 make up almost half of minimum-wage workers, according to the Bureau of Labor Statistics. About 3 million workers earn the minimum wage in America. When the wage mandate increases, younger workers are more likely to be affected.
The paper, written by Jeffrey Clemens, an economist at the University of California, San Diego, estimated that the minimum wage increases were responsible for 43 percent of the employment for young, uneducated workers during that time period.
“The minimum wage has become more binding on the distribution of low-education, low-experience individuals’ wages over time,” Clemens wrote.
That conclusion is not the consensus among economists, as there’s still a lot that’s unknown about how minimum-wage hikes affect employment. For young and low-skilled workers where their added value is marginal, however, a high minimum wage could prevent them from getting their foot in the door. For a lower wage, the training and risk with taking a new, young worker could be an investment for an employer, but a higher mandated wage could cause others not to bother.
As more states experiment with a higher minimum wage as a solution for poverty, it could cut off the workers whom advocates want to help. At a certain point, a high floor on wages could stifle the opportunity for new workers to gain skills and experience.
