subminimum wage

Year of Publication
1992
Abstract

Using data from a longitudinal survey of fast food restaurants in Texas, the authors examine
the impact of recent changes in the federal minimum wage on a low-wage labor market. The authors
draw three main conclusions. first. the survey results indicate that less than 5 percent of fast food
restaurants use the new youth subminimum wage even though the vast majority paid a starting wage
below the new hourly minimum wage immediately before it went into effect. Second, although some
restaurants increased wages by an amount exceeding that necessary to comply with higher minimum
wages in both 1990 and 1991, recent increases in the federal minimum wage have greatly compressed
the distribution of starting wages in the Texas fast food industry. Third, employment increased
relatively in those firms likely to have been most affected by the 1991 minimum wage increase, while
price changes appear to be unrelated to mandated wage changes. These employment and price
changes do not seem consistent with conventional views of the effects of increases in a binding
minimum wage.

Number
298
Date Published
02/1992
Publication Language
eng
Citation Key
Industrial and Labor Relations Review, Vol 46, No. 1, October, 1992
Krueger, A., & Katz, L. (1992). The Effect of the Minimum Wage on the Fast Food Industry. Retrieved from http://arks.princeton.edu/ark:/88435/dsp013x816m62z (Original work published 02/1992AD)
Working Papers

Year of Publication
1991
Number
280
Date Published
01/1991
Publication Language
eng
Citation Key
IRRA 43rd. Annual Proceedings, Vol. 43, 1991
Krueger, A., & Katz, L. (1991). The Effect of the New Minimum Wage Law in a Low-Wage Labor Market. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01hh63sv89x (Original work published 01/1991AD)
Working Papers