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Manhattan Institute

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Reforming the U.S. Youth Minimum Wage

report

Reforming the U.S. Youth Minimum Wage

August 9, 2016
EconomicsEmployment
OtherChildren & Family

Abstract

Unemployment among U.S. teenagers now stands at 16 percent. Raising the minimum wage, as many are advocating, will only make the situation worse.

Key Findings

  • There is a federal “youth minimum wage,” or YMW, under which workers up to age 20 may earn a wage of $4.25 per hour for the first 90 days on the job; but not all states include similar provisions in their own labor codes, and as a result, the federal YMW is not applicable in most states.
  • Only 15 states have adopted the federal YMW; 17 other states and the District of Columbia have some sort of youth exemption with additional restrictions on top of the federal ones; and the remaining 18 states have no YMW in their labor codes, which means that the adult minimum wage in the state applies across the board.
  • If all states and the federal government adopted a YMW of $4.25 for individuals aged 16–19, with no 90-day limit, the growth rate of employment for this group could increase by up to 8.9 percentage points, generating up to 456,200 additional jobs in the first year following enactment.

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