hank.walker@UNH.CS.CMU.EDU (09/21/86)
I used to believe that lowering the minimum wage would reduce teenage unemployment. Unfortunately there are some inconvenient facts that stand in the way of this theory. First the government in the past has provided benefits to employers that effectively meant they were paying less than minimum wage to unemployed people that they hired. Second, many businesses in many parts of the country (like fast food restaurants out in the suburbs) offer starting pay above minimum wage. The real problem seems to be that the jobs are not in the same place as the unemployed, and transportation to those jobs is difficult at best. It is possible to buy a junky car and minimum insurance and get to those jobs and come out ahead, but the entry barrier is sufficient to require higher than minimum wage to attract enough job applicants. -------