Monday, September 9, 2013

Record Teenage Unemployment

Link here

An excerpt:
In 1999, slightly more than 52 percent of teens 16 to 19 worked a summer job. By this year, that number had plunged to about 32.25 percent over June and July. It means that slightly more than 3 in 10 teens actually worked a summer job, out of a universe of roughly 16.8 million U.S. teens.
"We have never had anything this low in our lives. This  is a Great Depression for teens, and no time in history have we encountered anything like that," said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston. "That's why it's such an important story."

This story, however, doesn't mention the key difference between now and the (start of) the Great Depression.  The minimum wage.  The huge minimum wage increase to $7.25 per hour (from $5.25 per hour) occurred just before the recession started.  This meant a simultaneous big decrease in demand for teenage labor at the same time that cost of teenage labor would shoot upward.  

This excerpt provides evidence for the minimum wage causing the increase:

One of the more surprising findings of Sum's research is that teens whose parents were wealthy were more likely to have a job than those whose parents had less income. Some 46 percent of white male teens whose parents earned between $100,000 and $149,000 held a job this summer, compared with just 9.1 percent of black male teens whose family income was below $20,000 and 15.2 percent for Hispanic teen males with that same low family income.

This is surprising if you think "why would wealthy kids need to work?".  This isn't surprising once you think about who the minimum wage affects most.  Which kids were most likely to learn the skills to make they valuable workers when they were children?  The wealthier ones, of course.  They're still able to find jobs - or at least much more likely to find jobs.  The minimum wage has the biggest impact precisely on those who most need job training.  I agree with this line:

The natural order of career progression has been stunted.  "I think that means that a lot of workers aren't advancing through their careers," he said. "Younger workers aren't going to be progressing through their careers as they did before."
The fact that lower skilled teenagers can't find jobs is awful.  More because these job skills will help get future jobs with higher pay.  

Overall, this article is informative, but it is terrible reporting to never mention how the minimum wage is causing some of these problems.  



1 comment:

  1. Why not just make a six month exception from the minimum wage for everyone. The first six month that your employed you can work for any amount of money that you decide. After that the minimum wage takes effect. I just want to make one thing clear. If Im a teenager looking for my first job that is I have never been employed I would be able to work for the first six months Im employed for say 5 dollars an hour If I decided that was ok for the company to pay me that. Keep in mind this is just a one time six month exception. I do not mean the first six months your employed at every job you start. I think it might help with the teenage unemployment problem.

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