The Fair Minimum Wage Act of 2007 increased the national minimum wage from $5.15 per hour to $7.25 per hour. We attempt to evaluate the impact of this statute on low-skill labor. We do so by analyzing the effect of the law on the teen unemployment rate in the five states with no state minimum wages (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee). Using the adult unemployment rate as a control in a difference-in-differences analysis we find that the 2007 minimum wage increase had a negative effect on teen employment in these states.
"The Minimum Wage and Teen Unemployment: A Study of the Effect of the Fair Minimum Wage Act of 2007,"
Pepperdine Policy Review: Vol. 7
, Article 8.
Available at: http://digitalcommons.pepperdine.edu/ppr/vol7/iss1/8