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.


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