The Low-Wage Labor Market: Challenges and Opportunities for Economic Self-Sufficiency. Does the Minimum Wage Help or Hurt Low-Wage Workers? . Adults and the Minimum Wage

01/14/2000

Scant research has examined the effects of minimum wages on adult employment. In a review of studies that examined the effect of cross-state variations in minimum wages on state-level employment, Brown et al. (1982) found that minimum wages had a smaller effect on young adults (ages 20 to 24) than on teenagers. In general, a 10 percent increase in the minimum wage results in a 1 percent reduction in young adult employment. More recent research has found little evidence that minimum wages affect adults' employment status. For instance, one study found that state minimum wage increases during the 1970s and 1980s had no effect on adult employment.14 Another study found weak empirical evidence to support the theoretical prediction that minimum wages differentially affect adult employment across gender and race groups.15  In short, these studies and others suggests that moderate minimum wage increases do not adversely affect aggregate adult employment or reduce employment opportunities for at-risk adults (e.g., women and minorities) while improving employment opportunities for other adults.