CAMBRIDGE, MASS. — A 10 percent increase in the minimum wage can cut 1 to 2 percent of employed teenagers from the work force, report economists David Neumark and William Wascher in a study for the National Bureau of Economic Research Inc.
The federal minimum wage remained at $3.25 an hour from 1981 to 1990, when it was increased to $3.85. It is $4.25 today.
States have also set minimum wages above the federal levels. By 1989, 13 states had done so. The study finds that the introduction of a subminimum wage would offset job losses experienced by youths, especially in states with minimums that are higher than the federal level.