<P> Until the mid-1990s, a general consensus existed among economists, both conservative and liberal, that the minimum wage reduced employment, especially among younger and low - skill workers . In addition to the basic supply - demand intuition, there were a number of empirical studies that supported this view . For example, Gramlich (1976) found that many of the benefits went to higher income families, and that teenagers were made worse off by the unemployment associated with the minimum wage . </P> <P> Brown et al. (1983) noted that time series studies to that point had found that for a 10 percent increase in the minimum wage, there was a decrease in teenage employment of 1--3 percent . However, the studies found wider variation, from 0 to over 3 percent, in their estimates for the effect on teenage unemployment (teenagers without a job and looking for one). In contrast to the simple supply and demand diagram, it was commonly found that teenagers withdrew from the labor force in response to the minimum wage, which produced the possibility of equal reductions in the supply as well as the demand for labor at a higher minimum wage and hence no impact on the unemployment rate . Using a variety of specifications of the employment and unemployment equations (using ordinary least squares vs. generalized least squares regression procedures, and linear vs. logarithmic specifications), they found that a 10 percent increase in the minimum wage caused a 1 percent decrease in teenage employment, and no change in the teenage unemployment rate . The study also found a small, but statistically significant, increase in unemployment for adults aged 20--24 . </P> <P> Wellington (1991) updated Brown et al.'s research with data through 1986 to provide new estimates encompassing a period when the real (i.e., inflation - adjusted) value of the minimum wage was declining, because it had not increased since 1981 . She found that a 10% increase in the minimum wage decreased the absolute teenage employment by 0.6%, with no effect on the teen or young adult unemployment rates . </P> <P> Some research suggests that the unemployment effects of small minimum wage increases are dominated by other factors . In Florida, where voters approved an increase in 2004, a follow - up comprehensive study after the increase confirmed a strong economy with increased employment above previous years in Florida and better than in the US as a whole . When it comes to on - the - job training, some believe the increase in wages is taken out of training expenses . A 2001 empirical study found that there is "no evidence that minimum wages reduce training, and little evidence that they tend to increase training ." </P>

Where does the money for minimum wage come from