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




Quote from Neumark and Wascher (1996b) evaluating the Clinton minimum wage proposal that theeffect of the minimum wage is even stronger for minority youths.

Economic theory as well as empirical evidence has revealed that studies that have analyzed the minimum wage's net effect on employment may conceal a redistribution of employment within the analysis group — usually teenagers. Theory predicts that in comparing the effect of minimum wages on employment of different demographic groups, those groups with a larger share of minimum wage workers will face more severe disemployment. And because employed black and Hispanic teens earn lower wages on average and hence are more likely to be directly affected by minimum wage hikes than otherwise similar white teens, theory suggests that minimum wages have a larger negative effect on black and Hispanic teenagers than on white teenagers. For instance, some estimates predict that President Clinton's proposed minimum wage hike (a 19.4 percent increase) would disproportionately increase the number of minority youth who are neither employed nor enrolled in school, compared to otherwise similar white youth.16 However, empirical research has not found conclusive or consistent evidence that minimum wages have differential effects on employment across racial groups.17