Minimum Wage Legislation in the United States

Finis Welch

Expert InsightsPublished 1973

Summarizes available evidence of the effects of minimum wage laws on employment, especially of teenagers, on whom most data exist. Unlike earlier studies, this considers the effects of incomplete coverage. Federal minimum wage laws have been updated about every five years since 1938, each time raising the minimum to half the average manufacturing wage (except in 1973, when a Presidential veto held the minimum set in 1967). One effect has been to reduce total teenage employment. More than proportionate reductions in covered sectors are only partially compensated by increased employment in uncovered sectors where wages are depressed. Minimum wage legislation has also heightened teenagers' vulnerability to business cycles. Relationships to teenage school attendance have not been studied; do reduced employment opportunities increase school attendance, or do youths who cannot get part-time work leave to take full-time jobs? The concluding section discusses equity and efficiency and points to needed research.

Document Details

  • Copyright: RAND Corporation
  • Availability: Web Only
  • Year: 1973
  • Pages: 48
  • Document Number: P-5145

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Welch, Finis, Minimum Wage Legislation in the United States. Santa Monica, CA: RAND Corporation, 1973. https://www.rand.org/pubs/papers/P5145.html.
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