Economic theory predicts that an increase in the minimum wage, will result in frictional unemployment. Just who are the workers affected by the minimum wage?
There are only 2.7 million workers who earn the minimum wage or less. They represent 2.3% of the labor force. There are roughly 147 million workers in the labor force. These are the characteristics of those holding a job that pays the Federal minimum wage rate:
* They are young.
* Tend to be women
* Minimum wage workers represented all races, genders, ethic background.
* Minimum wage workers tend to work in leisure and hospitality sectors.
* Tend to be part-time workers.
These conclusions are taken from the 2007 Current Population Survey found on the BLS website.
Most economists believe that an increase in the minimum wage will increase unemployment. Usually, teens are the first to be let go. When I observe an increase in the minimum wage, I see employers cutting hours but not workforce. I think the percentage of minimum wage workers is so small that prices are not affected. These workers only marginally contribute to structural unemployment.