As minimum wage becomes more ubiquitous in states across the country, some analysts worry that higher wage increases will translate into fewer jobs for low-skilled workers, especially among those under the age of 20. The Manhattan Institute’s Preston Cooper suggests in his new paper the growth of youth minimum wage–separate from a wage for older people–could generate approximately 456,000 jobs within the first year.
The Manhattan Institute writes:
The idea behind a youth minimum wage is that employers will be more likely to hire young and inexperienced workers if they can pay them less than older and more experienced ones. In return, young people are able to gain work experience that can be applied to higher-paying jobs down the road. A federal youth minimum wage of $4.25 already exists, but due to conflicting state labor laws, it’s not applicable in most states. Even in the states where it can be used, it’s only applicable for the first 90 days of employment.
In Cooper’s paper, he reports that if all states apply a $4.25 minimum wage without a 90-day restriction, this could increase employment for young people by 9 percent, which would materialize into 456,000 jobs.
Summary post from The Manhattan Institute.
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