Teenage Unemployment Rate at Record High: NYT Blog Post Commenters Explain Why
By Tom Blumer
September 5, 2009 - 23:03 ET
Yesterday's Employment Situation Report from Uncle Sam's Bureau of Labor Statistics had lots of dismal news.
One of the bigger disappointments, but sadly not one of the bigger surprises, is that the teenage unemployment rate reached an all-time seasonally adjusted high of 25.5%.
People who know even a little bit about economics should understand why, but an oddly titled New York Times blog post by Catherine Rampall took a pass on realistically trying to explain it:
Oh What a Time to Be Young!
Pity the unemployed, but especially pity the teenage unemployed.
According to todayâs job report, the overall unemployment rate (the percentage of people in the labor force not working but looking for work) in August rose to 9.7 percent, its highest level in 26 years. The teenage unemployment rate, however, is at 25.5 percent, its highest level since the Bureau of Labor Statistics began keeping track of such data in 1948.
..... Of course, teenagers are likely to have fewer financial obligations than their older counterparts. But in a job market where older workers are expected to continue postponing retirement a little longer, the outlook still isnât good for young Americans desperate for the work openings that typical turnover and attrition can offer.
Many blog post readers explained it for Ms. Rampall, and accurately. Here are some of them:
Undoubtedly due to minimum wage increases. I donât know of a single business that kept on as many teenage workers when the minimum wage increased. -- Josh
Wow. The kids are applying for unemployment instead of just going back to school and studying. Free is free. When I was in school, I never considered applying, even though I could have. -- Cathy
Combine Cathyâs great comment with the fact that the minimum wage keeps raising such that the output they produce doesnât match their costs, and you have all the answers you need. -- Jeffrey
Higher minimum wages will kill job prospects for the young. In 27 years of business I never paid just the minimum wage, but now I have to in California. It costs way too much to train someone before they become productive; itâs just not worth it and now I am much more likely to cut my losses with a slow learner rather than train them more. -- Jon A
.... This happens every time they increase the minimum wage; teenagers are laid off and their wages are spread around to pay the remaining workersâ higher wages. The first full month of the new minimum wage, 150,000 teens lose their job. It is a sadly predictable result of liberal policy. -- Vitalis
The federal minimum wage was $5.15 per hour from September 1, 1997 until July 24, 2007. The 1997 increase did not have a material effect on the employment market, because most employers were already paying starting workers more than $5.15. During the following 10 years, the highest seasonally adjusted teenage unemployment rate was 19.0% (June 2003).
The federal minimum wage was increased to $5.85 on July 24, 2007; to $6.55 on July 24, 2008; and to $7.25 on July 24, 2009. In July 2007, teenage unemployment was at 15.1%. By August 2008, it was at 19.2%. Now we're at 25.5%.
I'd say there's a correlation, and that the press isn't willing to make it. The minimum wage is a favorite of the left, no matter how many kids and low-skilled adults it throws out of work. Supporting minimum-wage increases is considered one of the things the late Sen. Ted Kennedy "got right." I don't see how.
