The potential effects of raising the minimum wage on the earnings of mothers moving from welfare to work were examined by analyzing the differences that existed in the late 1980s in the various states' minimum wage rates and data from three waves of the Survey of Income and Program Participation for the years 1985-1990 (during which time 13 states had minimum wages set above the federal level). Increases in the minimum wage were found to have had significant negative effects on the work patterns of mothers receiving Aid to Families with Dependent Children. Half the welfare mothers residing in states that did not raise their minimum wage reported working at some time during the 6 years studied versus only 40% of the welfare mothers in states that had raised their minimum wage. Increasing the minimum wage resulted in a 44% longer duration on welfare. It was concluded that increases in the minimum wage intensify competition for low-skill, low-wage jobs. Increases crowd out the least skilled workers, including mothers attempting to leave welfare, by raising the educational qualifications for marginal workers to high school graduation. (Contains 11 tables and 60 references. Appended are definitions of variables used in the tables and information about the state minimum wage panel data set.) (MN)