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Minimum wage labor market distortions

As explained in Chapter 6, a minimum-wage law distorts the market for low-wage labor. To reduce this distortion, some economists advocate a two-tiered minimum-wage system, with a regular minimum wage for adult workers and a lower, 'subminimum' wage for teenage workers. Give two reasons a single minimum wage might distort the labor market for teenage workers more than it would the market for adult workers.

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Minimum wage laws distort the market by increasing the number of workers and decreasing the number of jobs available. Teenagers have a low marginal product, ...

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Minimum wage labor market distortions for teenage workers.

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