Federal minimum wage statutes cover only 70 percent of the work force
and 30 percent of all employers. State laws are designed to close some
of these coverage gaps and in some cases to set higher wage floors. H
ence, differences in state wage floors and coverage should affect empl
oyment rates and wage distributions, particularly among low-skilled wo
rkers. Evidence from the National Longitudinal Surveys of Youth is mix
ed, however: State wage floors appear to have no impact on youth emplo
yment or entry wages, but coverage exemptions appear to increase both
employment and wages. These observations underscore the need to includ
e state provisions in models of minimum wage impacts, particularly for
later periods (e.g., 1988-1991) when state wage floors were relativel
y higher.