Do the skills of adults employed in minimum wage contour jobs explain why they get paid less?

Using data from the National Longitudinal Survey of Youth, we compare the pay of workers employed on the minimum wage contour to the pay of similar workers in other jobs. We also examine whether the minimum wage increases of 1990 and 1991 narrow the pay gap. We find that characteristics of minimum wage contour workers explain most of their relative pay disadvantage; however, from 1986 to 1990, a residual wage gap of 5.0 to 5.8 percent emerged. The increases in the minimum wage help to slow the gap's widening.