NCPA - National Center for Policy Analysis


October 7, 2009

Based on the data, the current job situation for teenagers in America is the worst on record, notes Tom Blumer, president of a training and development company in Mason, Ohio, and a contributing editor to NewsBusters.

According to Uncle Sam's Bureau of Labor Statistics:

  • Seasonally adjusted teenage unemployment hit 25.9 percent; that is the highest rate in the nearly 62 years BLS has been reporting this number.
  • The previous record was last month's 25.5 percent; the record before that was 24.1 percent in November and December of 1982.
  • Unemployment among black teens not enrolled in school is over 50 percent.
  • The rate among 20-24 year-olds is also alarmingly high at 15.1 percent.

The Wall Street Journal commented on this distressing set of circumstances, identified the most likely cause of the problem, and worried about its longer-term consequences.

"Washington will deny the reality, and the media won't make the connection, but one reason for these job losses is the rising minimum wage."

Economist David Neumark of the University of California, Irvine, wrote that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs.  Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers.

The September teen unemployment rate hit 25.9 percent, the highest rate since World War II and up from 23.8 percent in July.  Some 330,000 teen jobs have vanished in two months.

Congress and the Obama Administration simply ignore the economic consensus that has long linked higher minimum wages with higher unemployment:

  • Two years ago Neumark and William Wascher, a Federal Reserve economist, reviewed more than 100 academic studies on the impact of the minimum wage.
  • They found "overwhelming" evidence that the least skilled and the young suffer a loss of employment when the minimum wage is increased.

If Congress won't suspend its recent minimum wage hike, it should at least create a teenage wage of $4 or $5 an hour to help put hundreds of thousands of teens back to work, says Blumer:

  • White House chief economic adviser Larry Summers has endorsed this in the past.
  • Without this change, expect the teen unemployment to remain very high for a long time.

Source: Tom Blumer, "Record Teen Unemployment: Only WSJ Seriously Looks At Minimum-Wage Hikes As Cause," NewsBusters, October 5, 2009.

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