Young workers trying to break into the job market will find it more difficult obtaining employment. This also affects adults with little job experience or little to no job skills. Companies who are now required to pay employees a higher wage will try to hire the most capable workers for that specific job. The idea is that job requirements will become fiercer as companies will try to get the most out of their investments. “When the population is divided on the basis of age, race, ethnicity, education, and marital status, we find that subgroups with more low-wage workers in 1989 experience larger declines in employment following the increase in the federal minimum” (American Economic Review, 1995). For example, a company has to choose between a lower class worker and a middle class worker. More than likely the middle class worker will have better education, better job skills and a higher understanding for the job. This creates a bias towards this type of worker even though the lower class worker could possibly end up being the more effective employee. This idea is very relevant in the fast food industry. “Moreover, the fast food industry is a low-wage industry even within retail trade. The industry has lobbied against increases in the minimum wage and has been a staunch supporter of a subminimum wage for youths (Bureau of National Affairs, 1985). And the fact that the fast food industry has extremely high turnover, and hires many first-time workers, makes it more likely that fast food restaurants can take advantage of the youth subminimum” (NATIONAL BUREAU OF ECONOMIC RESEARCH,
Young workers trying to break into the job market will find it more difficult obtaining employment. This also affects adults with little job experience or little to no job skills. Companies who are now required to pay employees a higher wage will try to hire the most capable workers for that specific job. The idea is that job requirements will become fiercer as companies will try to get the most out of their investments. “When the population is divided on the basis of age, race, ethnicity, education, and marital status, we find that subgroups with more low-wage workers in 1989 experience larger declines in employment following the increase in the federal minimum” (American Economic Review, 1995). For example, a company has to choose between a lower class worker and a middle class worker. More than likely the middle class worker will have better education, better job skills and a higher understanding for the job. This creates a bias towards this type of worker even though the lower class worker could possibly end up being the more effective employee. This idea is very relevant in the fast food industry. “Moreover, the fast food industry is a low-wage industry even within retail trade. The industry has lobbied against increases in the minimum wage and has been a staunch supporter of a subminimum wage for youths (Bureau of National Affairs, 1985). And the fact that the fast food industry has extremely high turnover, and hires many first-time workers, makes it more likely that fast food restaurants can take advantage of the youth subminimum” (NATIONAL BUREAU OF ECONOMIC RESEARCH,