| HappySqurriel said:
On a side note: http://online.wsj.com/article/SB10001424052748704881304576094221050061598.html?mod=rss_opinion_main "Mr. Williams distinguished himself in the mid-1970s through his research on the effects of the Davis-Bacon Act of 1931—which got the government involved in setting wage levels—and on the impact of minimum-wage law on youth and minority unemployment. He concluded that minimum wages caused high rates of teenage unemployment, particularly among minority teenagers. His research also showed that Davis-Bacon, which requires high prevailing (read: union) wages on federally financed or assisted construction projects, was the product of lawmakers with explicitly racist motivations." |
Yeah, minimum wage legislation often results in higher unemployment amongst teens and young adults because businesses often don't want to risk the full wage on a person who has yet had enough experience to prove that they would make a good employee (punctuality, attendance, workshyness, etc), and so the minimum wage prices them out of the market.
In the UK, the Government tried to get around it by staggering minimum wage legislation as to reflect the increased risk. As always, they got it wrong, and young persons unemployment is still the highest in the country. They could lower the young person's minimum wages, or kill them entirely, though I'm sure that won't be politically popular. Of course, this will also just shift the unemployment across to the next bracket of workers. Minimum wage legislation just distorts the markets.
