Minimum Wages and Restaurant Employment for Teens and Adults in Metropolitan and Non-Metropolitan Areas
AAEA member releases new research in JAAEA
During 2005-2019, 38 percent of employed teens ages 16-17 worked in the restaurant industry. A 10 percent increase in minimum wages reduces teen restaurant employment by 5.2 percent.
In the new article “Minimum Wages and Restaurant Employment for Teens and Adults in Metropolitan and Non-Metropolitan Areas” published in the open access Journal of the Agricultural & Applied Economics Association, John Winters from Iowa State University, investigates how minimum wages affected restaurant employment for teens and adults during 2005-2019.
Winters says, “The restaurant industry is the single largest industry of employment for teens and is an important stepping stone into the labor force for many young workers. Minimum wages create winners and losers. Individuals who earn higher incomes are better off, but many entry-level workers who are kept out of the workforce by minimum wages are likely worse off. Some people may see the evidence and still conclude that some level of minimum wages yields higher gains than losses. That partially depends on one’s political preferences and how one weighs the gains versus the losses. My hope is that people will not blindly believe that there are no losses from minimum wages. Some people are made worse off, and we need to at least consider the burdens they bear. Furthermore, the burdens of minimum wages increase with the level of minimum wages. Even if one politically supports a $10 minimum wage, it does not mean that they should support a $20 minimum wage.”
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