Surprise! Youth employment rate hits record low

posted at 10:55 am on August 28, 2009 by Ed Morrissey

Since 2007, Democrats have led the charge to increase the minimum wage in the US, claiming that the poor hadn’t gotten a fair shake from employers.  Nancy Pelosi and the late Ted Kennedy pushed hardest for mandating increases in wages despite warnings that the net effect would be to lower employment for teens and entry-level workers while creating inflationary pressures on prices, negating the gains through loss of buying power.  For the second year in a row, those predictions have come true:

The proportion of people ages 16 to 24 who were employed in July was 51.4 percent, the lowest July rate since records began in 1948 and 4.6 percentage points lower than in July 2008. …

The Labor Department said 4.4 million youths were unemployed in July 2009, or about 1 million more than in July 2008, putting the youth jobless rate at 18.5 percent, about double the overall national percentage.

Fewer young people were even trying to be part of the labor force this year than in recent years, perhaps choosing summer school, odd jobs around the house or idleness instead.

I hate to say I told you so, but … wait — no, I don’t.  I wrote about it in July 2008, when teen unemployment shot upwards even before the economy had really crashed, thanks to fewer opportunities as businesses created less jobs.  I’ve been writing about this for years here at Hot Air and at Captain’s Quarters, as it is a particularly frustrating political topic.  Minimum wage increases always have this effect, and yet politicians get away with pandering on this issue.

Last year, I interviewed David Neumark, who wrote the book Minimum Wages that also predicted this very avoidable consequence:

Based on their comprehensive reading of the evidence, Neumark and Wascher argue that minimum wages do not achieve the main goals set forth by their supporters. They reduce employment opportunities for less-skilled workers and tend to reduce their earnings; they are not an effective means of reducing poverty; and they appear to have adverse longer-term effects on wages and earnings, in part by reducing the acquisition of human capital. The authors argue that policymakers should instead look for other tools to raise the wages of low-skill workers and to provide poor families with an acceptable standard of living.

The unemployment picture this year would have been bleak for teens and young adults anyway.  However, hitting new 60-year lows could have been avoided, and could have prevented a summer of “idleness” and worse.  The only people who benefit from minimum-wage increases in the long term are the politicans who use them to pander on the stump.

Update: Wow – second time today I’ve had to fix a title.  Must … have … more… coffee.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2

The plan is coming together quite nicely.

Large numbers of unemployed youth will be quite eager to become part of the Borg of community organizers.
Take your tax dollars and pay for organizing against your interests.

Its like good poetry…simple in its beauty of affect.

Itchee Dryback on August 28, 2009 at 11:50 AM

if government could set the minimum wage they could set the maximum wage and darned if Obama isn’t trying just that.

We the People should be able to set Obama’s maximum wage and I would vote that he owes us a few trillion for his first few months in office.

You break it, you bought it Barry.

Michelle better get her old job back and the kids will have to go to DC public schools.

NoDonkey on August 28, 2009 at 11:51 AM

You’re welcome. Your library should also have it–it’s a 30 year old book. I buy it for people, including a few that I hate.

JiangxiDad on August 28, 2009 at 11:45 AM

I’ll will buy it some daysoon, I hate libraries. Especially since in a town every school has one, the town has one the county has one, etc.

WashJeff on August 28, 2009 at 11:51 AM

Not true. Employers will try to raise the prices they charge, so that they can afford to pay workers more, but they won’t be able to sell the same quantity at the higher price. Until the inflated money supply pushes up nominal prices and makes the new minumum largely irrelevant, to whatever extent the minimum wage law has any effect on wages, it also creates unemployment. It really is simple supply/demand stuff here.

The Monster on August 28, 2009 at 11:44 AM

Both of you are correct, theoretically. In reality, the employer most often will not raise his product price, but will simply fire the lowest wage earner.

Ergo, “lowest youth employment”. That’s the reality of “minimum wage”.

BobMbx on August 28, 2009 at 11:53 AM

Gee, ya mean nobody’s too eager to hire a callow, ignorant youth that you have to train to use a stapler? Go figure.

mojo on August 28, 2009 at 11:53 AM

Michelle better get her old job back and the kids will have to go to DC public schools.

NoDonkey on August 28, 2009 at 11:51 AM

I hear some of the finest Madrassa’s in the world are in Tehran.

BobMbx on August 28, 2009 at 11:54 AM

I’m part of that 18.5%. There are literally no part-time jobs in California.

Sleeper on August 28, 2009 at 11:54 AM

The proportion of people ages 16 to 24 who were employed in July was 51.4 percent, the lowest July rate since records began in 1948 and 4.6 percentage points lower than in July 2008. …


This is not the change these worshipers were hoping for:

Check out this video of Obamessiah worshiping children:
http://www.reason.com/blog/show/129137.html

How’s that Hope and Change working out for you Obama youth.

Get ready for der leader to increase his control over you also:

(via Drudge)
August 28, 2009 12:34 AM PDT
Bill would give president emergency control of Internet
by Declan McCullagh

Internet companies and civil liberties groups were alarmed this spring when a U.S. Senate bill proposed handing the White House the power to disconnect private-sector computers from the Internet.

They’re not much happier about a revised version that aides to Sen. Jay Rockefeller, a West Virginia Democrat, have spent months drafting behind closed doors. CNET News has obtained a copy of the 55-page draft (excerpt), which still appears to permit the president to seize temporary control of private-sector networks during a so-called cybersecurity emergency.

Looks like another one of those “they told me this would happen if I voted for McCain” moments.

Baxter Greene on August 28, 2009 at 11:55 AM

Update: Wow – second time today I’ve had to fix a title. Must … have … more… coffee.

Ed, where is the Obamateurism of the Day today — I know you’ve got plenty of material. (Must have been a long night.)

Christian Conservative on August 28, 2009 at 11:56 AM

I’m part of that 18.5%. There are literally no part-time jobs in California.

Sleeper on August 28, 2009 at 11:54 AM

There are no jobs in Mexifornia.

BobMbx on August 28, 2009 at 11:56 AM

CNET News has obtained a copy of the 55-page draft (excerpt), which still appears to permit the president to seize temporary control of private-sector networks during a so-called cybersecurity emergency.

Attention, all planets of the solar federation, we have assumed control…..

BobMbx on August 28, 2009 at 11:58 AM

The young a$$holes that voted for Obama expect the older working folks to take care of them while they play computer games, send text messages, and otherwise yank their widdle wee-weeds. One day they will wake up and realize that they are going to be paying for Obama’s debt for the rest of their lives.

farright on August 28, 2009 at 12:00 PM

Ed, where is the Obamateurism of the Day today — I know you’ve got plenty of material. (Must have been a long night.)

Christian Conservative on August 28, 2009 at 11:56 AM

He said he had no material due to Obama’s vacation and our vacation from Obama on TV in his first post of the morning. Shocking isn’t it?

WashJeff on August 28, 2009 at 12:00 PM

One day they will wake up and realize that they are going to be paying for Obama’s debt for the rest of their lives.

farright on August 28, 2009 at 12:00 PM

And beating the crap out each other to get The One’s autograph on the upcoming “Obama: Mein Kampf da Ubermiester” at the ObamaBooks store, the only authorized book retailer in the country.

BobMbx on August 28, 2009 at 12:03 PM

BobMbx on August 28, 2009 at 12:03 PM

Mao had a little red book, while Barry have a little black and white book?

It remains to be seen . . .

NoDonkey on August 28, 2009 at 12:20 PM

In my city, the restaurants and amusement park usage is way down.

My thinking is that’s the jobs for kids, mostly.

AnninCA on August 28, 2009 at 12:23 PM

And I wonder how many of these little unemployed birdbrains were running through the streets yelling “Yes We Can!” during the ’08 election…

Apparently, “No you can’t.”

D2Boston on August 28, 2009 at 12:33 PM

Toyota urgently needs to cut capacity as car demand isn’t going to return to its peak anytime soon,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc. in Tokyo, which manages about 800 billion yen ($8.5 billion) in assets. “Nummi is unionized and expensive to operate. It’s a good decision.”

Shorter version: “Fukoku” to the unions

The Monster on August 28, 2009 at 12:43 PM

Do you suppose the feds understand that when young people are idle, police cruisers aren’t. Just sayin’.

jimmy2shoes on August 28, 2009 at 12:44 PM

For those headed to Townhall Meetings, thank the union thugs that are being bussed in for the Youth Employment rate. This whole minimum wage is linked to the unions and those fine leaders who get huge wages and perks which include a golf course in Michigan. Thanks SEIU, UFCW, CWA and others. Just wait until Card Check passes, these dweebs will have the control they need to run this country and economy into the ground!

Just say thank you to your friendly Democrat for this crap!

Atlanta Media Guy on August 28, 2009 at 12:54 PM

And I wonder how many of these little unemployed birdbrains were running through the streets yelling “Yes We Can!” during the ‘08 election…

Apparently, “No you can’t.”

D2Boston on August 28, 2009 at 12:33 PM

LOL

MCGIRV on August 28, 2009 at 1:04 PM

This all ties in with the mindset of the young lady who is sueing her college for not getting a job handed to her in her field right out of school.

Koa on August 28, 2009 at 1:09 PM

And I wonder how many of these little unemployed birdbrains were running through the streets yelling “Yes We Can!” during the ‘08 election…

Apparently, “No you can’t.”
D2Boston on August 28, 2009 at 12:33 PM

Right on!

MCGIRV on August 28, 2009 at 1:15 PM

This all ties in with the mindset of the young lady who is sueing her college for not getting a job handed to her in her field right out of school.

Koa on August 28, 2009 at 1:09 PM

They should refer her to a job in the field, there are artichokes in California that need to be picked.

NoDonkey on August 28, 2009 at 1:16 PM

farright on August 28, 2009 at 12:00 PM

Well said! To those youngsters who voted for Obozo, I echo some famous words: “You’ve been had!” Sound familiar?

Cue the Bob Dylan “How Does it Feel?” music . . . .

OneVision on August 28, 2009 at 1:21 PM

They should refer her to a job in the field, there are artichokes in California that need to be picked.

NoDonkey on August 28, 2009 at 1:16 PM

I like!!!

Koa on August 28, 2009 at 1:27 PM

BobMbx on August 28, 2009 at 11:49 AM

$5? How long ago was this. In my day – mid to late 80s – $15 was the going rate for a lawn, $20 if it was really big. Although the real money was made in winter. $10 to shovel a driveway, which would take 1/2 the time of cutting the grass. The per hour wage was phenomenal in the winter, and it was fun too.

angryed on August 28, 2009 at 1:34 PM

Basically, the whole economy “floats” on the level of the minimum wage — raise the MW and the economy will “float” up to a higher level with the new MW as the floor value.

Not true. Employers will try to raise the prices they charge, so that they can afford to pay workers more, but they won’t be able to sell the same quantity at the higher price. Until the inflated money supply pushes up nominal prices and makes the new minumum largely irrelevant, to whatever extent the minimum wage law has any effect on wages, it also creates unemployment. It really is simple supply/demand stuff here.

I think we are in agreement here. The issues you identify are short-term transients. That is the period of time while the economy adjusts to the new MW that the MW earner sees some benefit but people looking for work in that sector are shut out and some MW earners are laid off as their employers cut back during the adjustment period. I should have been clear that the “floating” effect is not a nice smooth transition, but rather a short term perturbation that causes significant issues across the board. The end result however is a net gain of zero for all involved.

AZfederalist on August 28, 2009 at 1:41 PM

What effect does illegal immigration have on that same job market on top of the raising of minimum wage. My 17 year old has had a hell of a time finding a job since he got to 1st time job age. Illegals have taken every job that I would have had available to me at that age.

oddjob1138 on August 28, 2009 at 1:52 PM

Based on their comprehensive reading of the evidence…

The sad thing is, one doesn’t even need empirical evidence to determine that minimum wage laws are always harmful. As anyone who takes freshman microeconomics finds out, economics proves as much a priori.

hicsuget on August 28, 2009 at 2:15 PM

Koa on August 28, 2009 at 1:27 PM

They’re great with hollandaise sauce, so I hope she gets crackin’/pickin’.

NoDonkey on August 28, 2009 at 2:20 PM

$5? How long ago was this. In my day – mid to late 80s – $15 was the going rate for a lawn, $20 if it was really big. Although the real money was made in winter. $10 to shovel a driveway, which would take 1/2 the time of cutting the grass. The per hour wage was phenomenal in the winter, and it was fun too.

angryed on August 28, 2009 at 1:34 PM

Lordy…I hate this part…..let’s call it 1972-73-74ish. On an Air Force base, usually. Back when Michael Jackson (and the other 4 Jacksons) were battling Donnie (and the other 3 dozen Osmonds) both in concert and in cartoon land. First rate stuff. Remember, I’m talking about missing first run Scooby-Doo’s.

BobMbx on August 28, 2009 at 2:24 PM

This all ties in with the mindset of the young lady who is sueing her college for not getting a job Paycheck handed to her in her field right out of school.

Koa on August 28, 2009 at 1:09 PM

FIFY.

BobMbx on August 28, 2009 at 2:27 PM

How else was Obama going to recruit for his civilian defense corps?

evergreen on August 28, 2009 at 2:57 PM

Minimum wage is one of the most IMMORAL policies – evah. It hurts the most vulnerable in society at their most vulnerable age when they are at their greatest need. There’s a special place in hell………

rock the casbah on August 28, 2009 at 3:08 PM

Remember, I’m talking about missing first run Scooby-Doo’s.

BobMbx on August 28, 2009 at 2:24 PM

Nice. I guess $5 in 1972 was the equivalent of $15 in 1987 thanks to Jimmah Cahtah’s runaway inflation of the late 70s, early 80s.

angryed on August 28, 2009 at 3:42 PM

Here in California, the problem is two-fold thanks to illegals sucking up all these jobs.

A co-worker was just complaining to be about her son, who’d been trying to find work all summer but to no avail.

Which brings me to an interesting personal observation…

During my trip home to N.C. this past July, every fast-food and sit-down restaurant I ate at was employed with high school age kids and in some cases, senior citizens.

You never see that anymore here in Los Angeles.

The Ugly American on August 28, 2009 at 3:46 PM

Minimum wage is such a compelling concept that many normally rational people fall for it. They think only of the “look how much we’re helping poor people” part and rarely move on to examining how it impacts hiring and prices. Even my husband, a pretty solid conservative, thought this was a good idea until I had him think it through. I used a real life example from a patient who is a manager at a local Chuck E. Cheese whose employees are all young, minimum-wage earners. She is given a set amount from corporate to pay for staff each month based on her store sales and she usually has to let one person go or drop someone to part-time every time the minimum wage goes up. Store sales or prices have to go up to hire more staff. The only people that benefit long-term from this economically illiterate idea are union employees whose contracts are tied to minimum wage.

inmypajamas on August 28, 2009 at 3:52 PM

I’ve experienced this first-hand. My 16-year-old son was never able to find a job this summer. He did a couple of odd jobs for neighbors, that’s it. He really needed to help us out by paying for some of his school activities – music programs are expensive. Instead, my husband and I are working as much overtime as we can and we’re all working the fundraising activities for the group.

I NEVER had a hard time finding a job as a teenager, either did my friends. We all worked, bought our own cars, paid for our own entertainment, clothes, etc., and saved for college. It’s almost impossible for kids to do that today.

My 17-year-old daughter couldn’t find a job either, mostly because she has to work around her dance class schedule (ballet is her future career, hopefully). But people used to hire part-timers, not so much anymore. If you can’t work a set schedule – all weekdays, all weekends, etc. forget it. She couldn’t find any babysitting work either, despite the neighborhood being full of kids. We’re resigned to paying her way until she’s out of college or full-time with a ballet company, whichever works out. Sigh….

Common Sense on August 28, 2009 at 3:54 PM

Common Sense on August 28, 2009 at 3:54 PM

It’s all in the approach. When your teens apply for a job, have them use names like Jose and Maria, and tell the manager they don’t mind working under the table.

It used to be colored resume paper; now it’s immigration fraud that gets the job.

BobMbx on August 28, 2009 at 4:02 PM

I can’t tell you how many times I’ve asked a question at a drive-thru, only to get the smiling-nodding, no-speakie-English treatment.

I’ll take a surly, emo-attitude high school kid who at least knows some semblance of the English language than some grinning, bobble-headed moron.

Besides, it’s karma for when I was a surly high school kid who hated adults and authority figures.

The circle of life.

The Ugly American on August 28, 2009 at 4:06 PM

The Stimulus included $1.2 BILLION for summer Youth Jobs. Where did all that money go??

TN Mom on August 28, 2009 at 4:25 PM

Hmmmm, did I miss something or did no one comment on the last minimum wage increase that Nancy “Starkist” Pelosi managed to write an expemtion to? That was the increase where the fine print excepted the inhabitants of American Samoa where the large tuna packing plant is located, the packing plant owned by the company her hubby is a big shot. Or have I got a lousy memory?

Robert17 on August 28, 2009 at 9:05 PM

Okay, I really want to know what the original title was.

pannw on August 28, 2009 at 11:12 PM

Comment pages: 1 2