Higher labor costs reduce employment. That is why President Clinton's proposal to raise the federal minimum wage should be rejected. A higher minimum will further reduce the employment opportunities of workers with few skills.
Teenagers, high school dropouts, immigrants, and other low-skilled workers frequently earn less than $5.15 per hour, the proposed new minimum. They find employment in small establishments, especially in fast-food chains and other retail sectors. Increasing the minimum, as the President wants, would put some of them out of work since their productivity is not high enough to justify the cost to employers.