The Dem's Disastrously Timed Minimum Wage Hikes Hit Teens & Black Youth the Hardest

Teenagers who looked for work last summer were out of luck. The teen unemployment rate rose to a record high of 25.5 percent in August of 2009, up from 23.8 percent in July. This was more than ten points higher than the record 9.7 percent national unemployment rate announced in September of 2009. The teenage unemployment rate last year was at its highest level since the Bureau of Labor Statistics began keeping track of such data in 1948.


This chart comes from The Wall Street Journal via Carpe Diem

There was another factor that may be hurting teens, the disastrously timed minimum wage increases. Economist David Neumark wrote in The Wall Street Journal last fall that the minimum wage increase in July 2009 would destroy an additional 300,000 jobs nationwide, concentrated among the most vulnerable and least skilled employee populations. Neumark added that with the aggregate unemployment rate at 9.4 percent in May 2008, the teen unemployment rate exceeding 22 percent, and the unemployment rate for black teens nearing 40 percent, July’s minimum wage increase seemed like the worst thing possible. He was right. The teen unemployment rate jumped 3.5 percentage points in one month.

Since last summer after the minimum wage was increased the job situation for teens has became even worse.
The Wall Street Journal reported:

There’s plenty of competition, but our vote for the recent act of Congress that has caused the most economic hardship goes to the May 2007 law raising the minimum wage in three stages to $7.25 an hour from $5.15. Rarely has a law hurt more vulnerable people more quickly.

A higher minimum wage has the biggest impact on those with the least experience or the fewest skills. That means in particular those looking for entry-level jobs, especially teenagers. And sure enough, as nearly all economic models predict, the higher minimum has wreaked havoc with teenage job seekers, well beyond what you would expect even in a recession…

…But as the minimum wage increased even as the overall job market began to worsen, the damage to teen job seekers became more severe. By the time the third increase to $7.25 from $6.55 took effect in July 2009, the teen jobless rate was 24.3%, and by October it peaked at 27.6% before dropping to 26.4% in January.

The story is even worse for black teens, who often have lower than average education levels or live in areas with fewer job prospects. Their jobless rate climbed from 38.5% before the third wage hike to 49.8% in November 2009, before falling back to 43.8% in January. For black male teens, the rate climbed to 52.2% in December from 39.2% in July. The difference between the jobless rates for black teens and the entire population widened by six percentage points from June 2007 to January 2010. Even assuming those rates fall as the job market improves this year, they will remain destructively high.

Previously:
Disastrously Timed Minimum Wage Hikes Hit Teens the Hardest

Related… Obama Rewards Young Voters With More Leisure Time as Youth Unemployment Soars

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