Minimum wage laws take employment opportunities away from young people

As minimum wage fever continues to grip Sacramento and Washington, D.C., Veronique De Rugy at Reason magazine provides a useful corrective on how minimum wage laws effectively prohibit young people from taking their first step on the employment ladder.

After a surge from the sixties to the end of the seventies, the share of young adults who are in the labor force--the percentage, that is, who are either working or looking for work--has been declining. Labor force participation for people aged 16-24 fell from 69.1 percent in 1979 tp 54.1 percent in 2014. It has since gone back up a little to 55 percent.

A factor exacerbating this trend os the increase in minimum wages at the state and local level. A long trail of research shows that these policies reduce employers' incentive to hire relatively low-skilled workers--including of course inexperienced teenagers. One consequence is that work is being done by a smaller number of more highly skilled employees--and by robots, since a high minimum wage pushes companies to shift toward automation.

Importantly, research also shows that minimum wage diktats hinder low-skilled workers employment opportunities going forward by making it hard for them to get their foot in the door of a job in the first place. This is especially true for teens from minority groups. As Michael Farren noted in a 2016 article at Inside Sources, a wage floor "sacrifices the future to try to save the present."

Read the whole thing here.

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