With many states facing record numbers of unemployed teens, economists debate whether to blame the downturn or minimum-wage hikes
As the economic recovery stalls, teen unemployment is hitting record levels in many states. Nationally, the unemployment rate for Americans ages 16 to 19 is more than 24 percent — and more than 40 percent for African Americans. There are many causes for the dire statistics, but conservatives say one is the hike in the minimum wage from $5.15 an hour in 2007 to $7.25 by 2009. Is that really why so many teenagers can't find work?
Of course the minimum wage is hurting teens: Driving the minimum wage ever higher "doesn't end up delivering prosperity," says Ed Morrissey at Hot Air. "It drives up business costs," which inevitably forces some employers to cut some jobs. And when they have to pay people $2 more an hour, they're going to give what work they do have to more experienced applicants rather than to inexperienced teenagers.
"How has that minimum-wage hike worked for teens?"
No. It's the recession, stupid: Obviously, "teens have been hit hard by the recession," says Anne Thompson at OurFuture.org. But the problem isn't the minimum wage, it's just that older workers are now taking jobs that used to go to teens. And as the "youngest, least experienced members of the workforce," teens are "among the last to be rehired in economic recoveries." Since World War II, teen unemployment has typically been 2.5 to 3.5 times the total rate. And "with overall unemployment at a painful 9.1 percent, May’s teen unemployment rate of 24.2 falls within that historic range."
"Minimum wage not to blame for teen unemployment"
Both sides are right... and wrong: Minimum wage opponents have a point, says Antoine Gara at Bloomberg Businessweek. It's true that, because the minimum wage is higher than the actual value of teens' labor, it keeps "some low-skilled workers out of the market." But as economists note, "the main cause of unemployment today is a lack of demand, not overpriced labor." Dropping the minimum wage might help a bit, but it's hardly a panacea.
"Would killing the minimum wage help?"
Other stories from this topic:
- Opinion Brief: Obama: A double-dip recession?
- In-depth briefing: Out of work - and out of hope
- By the numbers: Is the recession harder on men?