Based on the data, the current job situation for teenagers in America is the worst on record.
According to Uncle Sam's Bureau of Labor Statistics:
- Seasonally adjusted teenage unemployment hit 25.9%. That is the highest rate in the nearly 62 years BLS has been reporting this number. The previous record was last month's 25.5%. The record before that was 24.1% in November and December of 1982. A graphic of the complete history of the teenage unemployment rate that will open in a new window is here.
- Unemployment among black teens not enrolled in school is over 50%.
- The rate among 20-24 year-olds is also alarmingly high at 15.1%.
Almost alone among establishment media publications -- and even then in an editorial, not a regular news report -- the Wall Street Journal commented on this distressing set of circumstances, identified the most likely cause of the problem, and worried about its longer-term consequences:
Washington will deny the reality, and the media won't make the connection, but one reason for these job losses is the rising minimum wage.
Earlier this year, economist David Neumark of the University of California, Irvine, wrote on these pages that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs. Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers.
The September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months.
.... The biggest explanation is of course the bad economy. But it's precisely when the economy is down and businesses are slashing costs that raising the minimum wage is so destructive to job creation. Congress began raising the minimum wage from $5.15 an hour in July 2007, and there are now 691,000 fewer teens working.
.... Congress and the Obama Administration simply ignore the economic consensus that has long linked higher minimum wages with higher unemployment. Two years ago Mr. Neumark and William Wascher, a Federal Reserve economist, reviewed more than 100 academic studies on the impact of the minimum wage. They found "overwhelming" evidence that the least skilled and the young suffer a loss of employment when the minimum wage is increased. Whatever happened to President Obama's pledge to follow the science?
.... Study after study reveals that there are long-term career benefits to working as a teenager and that these benefits go well beyond the pay that these youths receive. A study by researchers at Stanford found that those who do not work as teenagers have lower long-term wages and employability even after 10 years. A high-wage society can only come by making workers more productive, and by destroying starter jobs the minimum wage may reduce long-term earnings.
.... If Congress won't suspend its recent minimum wage hike, it should at least create a teenage wage of $4 or $5 an hour to help put hundreds of thousands of teens back to work. White House chief economic adviser Larry Summers has endorsed this in the past. Without this change, expect the teen unemployment to remain very high for a long time.
The wonder of it all is that liberals still call "progressive" a policy that has driven the wages of hundreds of thousands of the lowest skilled workers down to $0.00.
The chances of a teen minimum getting through Congress, let alone being signed by the president, are unfortunately slim and none. The objection to the idea in the 1970s was that it would encourage employers to "fire the father and hire the son." Perhaps that fear was slightly justified in the case of interchangeable blue-collar jobs decades ago, but it's hard to believe that it would be a problem in today's much more technical and skill-based economy.
The Journal is virtually alone in noting the teen unemployment/minimum wage hike correlation. A September 23 AP report, while noting how ineffectual federally funded teen job-finding efforts were this summer, doesn't even mention the minimum wage. A September 4 story on the topic at the New York Times by Catherine Rampell devotes all of one sentence to the possibility that minimum-wage hikes might be largely to blame ("Increases in the minimum wage may have made employers reluctant to hire teenagers, said Marvin H. Kosters, a resident scholar emeritus at the American Enterprise Institute"), and doesn't even bother to evaluate it. Instead, Rampell tries to pin the blame on older workers reluctant to retire (even though there has been a dramatic spike in workers retiring to take Social Security benefits this year), and the higher percentage of kids in college (that shouldn't affect summer or Christmastime availability).
One possibly valid point Rampell raises is that "the ability of more young people to rely on family may allow them to be pickier about jobs and therefore to stay out of work longer than they did in previous recessions." My interpretation of this is that "too many overprotective parents are shielding their kids from the 'mean, cruel world.'" More kids than ever aren't taking their first job, even in good times, until they have stopped going to school either after high school or college. Part of the blame should probably also go to high school extracurriculars that demand what I believe are often excessive summertime commitments (e.g., band, sports). I'm not sure that parents, or the schools, are doing kids any favors by keeping them away from the early lessons one can learn in exposure to the working world.
Cross-posted at BizzyBlog.com.
—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters




















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Around here the wages for
October 5, 2009 - 02:22 ET by Dan The Man 2Around here the wages for fast food places is about 8 bucks an hour give or take. Something interesting though the job fair I was at a couple of weeks ago had UPS there. They were offering a bit over 8 bucks for backbreaking warehouse work loading and unloading. The funny thing is I remember getting about teh same wage 33 years ago when wages were much less like 3 or 4 bucks.
Know how to keep a Troll in suspense? Ill tell ya in the morning.
Entrepreneurship
October 5, 2009 - 03:22 ET by Jeff in Miami BeachSince Nance Pelosi made America Samoa exempt from the minimum wage as a gift to Big Tuna, maybe we need to send our kids to Samoa for jobs. When I was that age “and experience level” I mowed lawns and sold magazines door to door. There are still opportunities but kids will have to sell it themselves. Most kids are either too shy or lack discipline to clean windows, mow lawns, paint fences, trim trees, clean gutters or the thousands of other things that will put money in their pockets. Most of these are not fun, in the heat and really are unpleasant compared to sneaking a free fry from time to time. There are still opportunities but the good corporate ones have gone the way of the rest of the jobs.
I personally like the idea of the young learning to do their own company because it teaches them about entrepreneurship. So that when they get older they know they can do something on their own and who knows it may turn into a real company with real money.
Jeff
If you think medical care is expensive now wait until it is free!
And the decision is...
October 5, 2009 - 05:45 ET by Red JeepCan we have some sort of Forum in this country to decide finally, for once and for all time, whether the Minimum Wage is beneficial or not? For forty years I have been hearing the minimum wage is good from one side and that it is bad from the other. The last 40 years of statistics should settle this. I suppose this is a dream because politics (lying) is involved with this issue, but this issue shouldn’t be a political football that can hurt tens of thousands of people.
The minimum wage is either effective or it is not.
Politicians are no more
October 5, 2009 - 05:54 ET by motherbeltPoliticians are no more interested in doing that than they are in having a discussion about whether the Great Society's Welfare State is a success after 40 years and $9 trillion.
Because it's about politics, not results.
"The minimum wage is either
October 5, 2009 - 14:57 ET by ckc1227"The minimum wage is either effective or it is not."
If it is effective, they should just set it at $20/hour so it will be even more effective.
This reminded me of
October 5, 2009 - 05:49 ET by motherbeltThis reminded me of something I read years ago, so I went to find it.
James Ostrowski had it all figured outwhen the MW went to $6.15/hr, and came up with this tongue-in-cheek proposal.
The Miraculous Minimum Wage
I just hope our congresscritters don't find out about it, since it just might seem like too good a plan to pass up!
Perfect, MB
October 5, 2009 - 08:01 ET by boomerconThanks for sharing. Now, how can we keep that out of Al Franken's hands? He will believe it!
Oustanding link!
October 5, 2009 - 09:47 ET by onewiseguyeom
I also know of a lot of
October 5, 2009 - 06:16 ET by MidAmericaI also know of a lot of parents who shield their kids from any work or chores around home. Many don't ask their nearly grown high schoolers to mow the grass because they 'won't do it good enough' or they may break the lawn mower. I believe this is the result of the advice that children should not be critisized but rather complimented no matter at what level they perform at. This only encourages lack of trying if they aren't interested. And a lot of teenagers aren't interested in real work, especially mowing the home lawn, trimming bushes or cleaning the garage. As a consequence many young adults enter the workforce and have a real tough time adjusting to the real world. Many stay home into their thirties just to avoid reality.
Missing one important fact-
October 5, 2009 - 06:40 ET by BKeyserBarry's got a plan for this: year-round school! No need for teen jobs if they're in school 9 hours a day. At that point, the school will limit work permit hours for full-time students to like 6 a week, and employers won't flood the payroll with teens who can only work Saturdays from 8-2.
no teen jobs
October 5, 2009 - 08:46 ET by LorraineNeither of my kids could find jobs this summer, even babysitting. There either weren't any jobs, or they wanted someone 18 and over. The grocery stores weren't hiring, one is in the process of closing, and the city cut way back on the temporary park and rec jobs.
When I was in high school, almost all of us worked. Now, only a few of my kids friends have jobs.
Who wants to hire a kid and deal with labor laws when there are so many adults out of work?
uncertainty in times ahead
October 5, 2009 - 09:49 ET by jon_torlinA lot of businesses are indeed holding off on hiring anyone for a while, basically a hiring freeze. One of the biggest reasons of not hiring is due to the unstable nature that is the economy right now, not to mention the upcoming tax increases as well as potential penalties for making too much money.
One thing's for sure, the current Congress is not making anything easy for consumers and entrepeneurs alike, especially the Finance Committee. As long as people like Frank are in control and are not being held accountable for their actions such as with the banks, businesses have no choice but to hold off or close off.
When will the people hold them accountable?
-Jon
Oustanding link!
October 5, 2009 - 09:46 ET by onewiseguyeom
I wrote about this
October 5, 2009 - 10:53 ET by sevenJuly 2008
It works that way. If wages were lowered, employment would be up. Mandatory healthcare will ad 3 million unemployed. Tax and tirade will add 2 million. Supply and demand curses haven't changed much since I finished economics school in 1973.
not just wages
October 5, 2009 - 11:15 ET by jon_torlinBut the pressure on employers for other things like health care and etc would be taken off.
Places of employment should be free to pay their workers however they want to, and if the person working there doesn't like it, see ya, there's the door, we'll hire someone else.
Another problem is the cost of living, or rather services. All these taxes that are coming out affect the cost of living, such as gas prices. Fuel prices of one kind or another affect like, for example, there are some power plants that use natural gas for their generators, or maybe some other fuel(coal). I've seen it passed down to the consumer the cost increases, so the rate for KwH (Kilowatt per hour) will go up in their dwellings. Oh yes, the EPA doesn't help matters with their regulations which in turn affect prices.
Gasoline is another thing, we need new refineries to replace the old ones but there hasn't been one built in 30 years. Plus (another one for the EPA) there's the 44 blends of gas, this affects production which affects price costs. I drive an F-150, it's got a 25 gallon gas tank, I don't like that it now costs about 40-60 dollars to fill it up, makes it prohibitive for road trips. But costs like that add up and affects families who are trying to get by and forces them to cut back on a lot of things, including things they might need.
Every one of those things affect how we live, including getting wages for what we do. There's more, this is just the nutshell version. Taking money from the rich won't solve anything. Neither will socialism or government-run businesses.
-Jon
"I drive an F-150, it's got
October 5, 2009 - 15:32 ET by ckc1227"I drive an F-150, it's got a 25 gallon gas tank, I don't like that it
now costs about 40-60 dollars to fill it up, makes it prohibitive for
road trips."
As opposed to what, the $100.00 it cost to fill up the same truck a year or so ago? You could always pretend you had a car-sized gas tank, and fill it up
only half way. Then a "fill up" would only cost you $20-$30. :)
You've got a big gas tank, that's why it costs so much to fill up. What makes it prohibitive for road trips is the 15-18 mpg.
Don't get me wrong, I agree with you....but considering what gas was not too long ago compared to now, I can't complain. In fact, I'm going to enjoy it, because if Obama gets his way, $4.00 gas will be known as the good ol' days for gas prices.
"The chances of a teen
October 5, 2009 - 15:09 ET by ckc1227"The chances of a teen minimum getting through Congress, let alone being
signed by the president, are unfortunately slim and none."
Nor should it. It's a silly idea, and probably not even a legal one. What's next, mandating different wages for women, or maybe a black minimum to combat the high black unemployment rate?
Valid point
October 5, 2009 - 15:14 ET by Tom BlumerI agree there shouldn't be a min wage, or it should be set so low that anything below could be legally considered servitude. But if you're going to have a job-killing minimum wage, which isn't going away in the real world, you at least could structure a "training wage" for a person's first year in the workforce that on that basis might pass legal muster.
But to repeat, I agree there shouldn't be a minimum wage.
If your business is
October 5, 2009 - 15:20 ET by Another Dead KennedyIf your business is suffering so badly that you can't afford to pay an employee the minimum wage, then you have no business being in, er, business. In California, minimum wage is $8/hr. $8 x 8 hr day = $64, plus 21% in payroll taxes and you're looking at a whopping total of $77.44/dy. If business is thriving so greatly that you need an extra employee, I hardly think $77/dy will be putting anyone out of business.
xoxo - Ted
That Depends ....
October 5, 2009 - 15:41 ET by Tom Blumer.... on whether you can get $100 - $150 or more (depending on the industry) in value out of that employee, considering the cost of your management time and attention, and hopefully an allowance for profit.
True. Which brings me back
October 5, 2009 - 15:52 ET by Another Dead KennedyTrue. Which brings me back to my initial point: if you're barely scraping by while paying that $77/dy, chances are your business problems are worse than you anticipated, and you're probably heading into bankruptcy regardless of the minimum wage.
xoxo - Ted
Not sure about what buisness your in, but
October 5, 2009 - 16:35 ET by general companyIt also makes it more difficult to grow and expand services. Its not just $77 a day, it also includes insurance and workman comp and a few other items your particular buisiness may need to function. Your simple math isnt even the half of it
My Gov. thinks I am dangerous, so be careful
"Television is a freak show" Bernie Goldberg
FICA: 6.2% Medicare:
October 5, 2009 - 16:43 ET by Another Dead KennedyFICA: 6.2%
Medicare: 1.45%
FUI: .8%
SUI: 6.2%
Workers comp: 5.71%
Accounting. Why, what business are you in?
xoxo - Ted
Training costs, retention,
October 5, 2009 - 18:34 ET by Dan The Man 2Training costs, retention, benefits, insurance, recruitment costs. Teddy there are plenty of other costs involved besides these, intangible ones.
Know how to keep a Troll in suspense? Ill tell ya in the morning.
Really? Are you an
October 5, 2009 - 18:46 ET by Another Dead KennedyReally? Are you an accountant as well? You know I included SUI, FUI, and worker's comp insurance. Benefits? You hardly need to concern yourself with benefits for a minimum wage employee. Recruitment? Yeah, the "now hiring sign" out front costs, what, about $.05 to create on your computer, or if you want to get really fancy you can buy a sign for a few bucks. We're talking minimum wage employees here, not upper management.
xoxo - Ted
What no total?
October 5, 2009 - 19:26 ET by general companyJust 77 bucks, you knew you were being deceptive even as you were suggesting just 77 bucks. Not very nice. Not to mention what your idea of a profit margin is, when you bid aganst others, every dollar counts. And if your realy a CPA, you should know this.
If I ran crews in the local Plants, you would have to add training and any industry classes that may be needed then toss in drug screens, physicals, orientation courses, backround checks, saftey classes and gear. Just to get you through the door on your first day.
My Gov. thinks I am dangerous, so be careful
"Television is a freak show" Bernie Goldberg
Your local plants pay
October 5, 2009 - 20:47 ET by Another Dead KennedyYour local plants pay minimum wage? And that's for a skilled position? We're talking minimum wage jobs here.
xoxo - Ted
MINIMUM WAGE HURTS THE
October 5, 2009 - 15:13 ET by deerjerkydaveMINIMUM WAGE HURTS THE POOR!
If you are an entry level worker and your skills are worth less than minimum wage then you CANNOT get a job! Teens are being priced out of the job market by minimum wage increases.
No justification
October 5, 2009 - 17:04 ET by slickwillie2001The minimum wage was just increased by 10.7%.
Last year it was increased by 11%.
In 2007 it was increased by 13%.
These increases are far above the rate of inflation and have no logical justification. The democratics just pick numbers out of the air that sound nice. The average corporate profit margin is a few percent, like between 3% and 8%. All this means is that anything left that can go to China will go, the corporations that are able to pass on costs will do so, the rest will cut back somewhere. They will lay off, not hire, not invest in an expansion, import more of their end-product, or use part-time instead of FT.
This is the way greedy democratics always think; they see corporations as a fat cow that can always give a little more milk.
That's alarming news!!!
October 5, 2009 - 21:02 ET by RR GOPThat's alarming news!!! My God, imagine how this will affect the cell phone, X-box, night club industry, and illegal drug sales!
Something must be done!
One of the 34% who thinks George W. Bush was a great President. One of the 86% who wants to bring back the stock and pillory.