Wednesday, February 19, 2014

Minimum wage job loss and teens

One thing I don't see anyone talking about in the wake of CBO report on job losses and wage gains resulting from a minimum wage increase is who will lose those jobs. I think most people would agree that it's better if middle-class teens working part time lose their jobs than for single moms working full time do. And it turns out that is just the case.

Teenagers would be disproportionately hit. The CBO estimates that the elasticity for directly affected adults is about 1/3 of that for teens. See page 25 & 26 of the report.

And from page 30
The reductions in employment would be concentrated more among teenage workers than among older workers
That doesn't mean that it is a good or bad trade-off (higher wages for some and job losses for others) but it does tilt the scales a little.

Update: Here's why this is relevant, The Heritage Foundation has objected to raising the minimum wage because "most minimum-wage earners are young, part-time workers and that relatively few of them live below the poverty line." Dubious claim, but the underlying idea is that we should not try to help suburban teenagers, but rather the working poor. OK, well, the CBO report says that teenagers will bear the brunt of the job losses. So, it seems that raising the minimum wage will help the working poor at the expense of suburban teenagers. Isn't that what conservatives want?

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