While the rest of the US workforce makes at least the federal minimum wage of $7.25, Americans below 20 years of age can be paid as low as $4.25 for the first three months of their job under US labor law.
The Fair Labor Standards Act (FLSA) allows young workers to be paid below minimum wage—also known as a “subminimum wage” or “youth opportunity wage”—on a temporary basis. In D.C. and nine states including Washington, Illinois, and New Hampshire, employers can pay young workers subminimum wages permanently under state laws, according to a report from the Economic Policy Institute (EPI) published Jan. 8.
Other rules surrounding young workers also result in reduced pay for this subset of the labor force. For example:
- Full-time students can be paid just 85% of minimum wage when they work retail and service jobs
- Summer camp employees and babysitters working less than 20 hours a week are completely exempt from federal minimum wage law
Why youth pay matters, according to advocates
The EPI report argues that young people are unfairly paid less to perform the same tasks, and lower wages for youth employees have negative effects on the workforce overall, putting “downward pressure on wages for all workers in industries that employ youth.”
“If a business can hire a 16-year-old to perform the same job as an adult, but pay them less, that employer has little incentive to raise pay to attract and retain those adult workers,” said the analysis. “Age-based subminimum wages also create incentives for employers to fire staff when they reach adulthood if employers can find new young replacements easily.”
Even as policymakers have moved to enhance protections over the years for domestic and “tipped” workers such as waiters, along with those with disabilities, the movement to protect young workers from age-based pay discrimination is only just gaining momentum. In the last year, however, support for an end to subminimum wages has picked up.
Gaining momentum
In the first two months of 2023, Rhode Island and Kentucky policymakers introduced bills that would eliminate its youth subminimum wage. Around the same time, young people in Virginia successfully rallied against a Republican-backed state bill that would have set minimum wages for workers under the age of 18 between $7.25 and $9, below Virginia’s $11 minimum wage. Nebraskans protested a bill introduced by Democratic state senator Jane Raybould that would have permanently set a youth wage 25% lower than the state minimum wage.
Delaware and New Mexico state bills eliminated youth subminimum wages in 2021. At the federal level, US representative Robert Scott of Virginia introduced the “Raise the Wage Act of 2023” in July, which includes a provision to phase out below-minimum wages for young employees.
More young workers
The seeds of change come just as young people are participating more in the labor force. Since the pandemic, the share of young people in the US workforce has risen to its highest rate since 2008.