The story of rising overall unemployment is clearly gaining a lot of attention. However, what's not been gaining much attention is another more pernicious story: that of rising unemployment among teen-aged workers.
An editorial in yesterday's Wall Street Journal argues that the increasing U.S. minimum wage has disproportionally hurt younger and lower-skilled workers. The teen unemployment rate now stands at 25.9%, its highest level since World War II. In Massachusetts alone, during the same period the minimum wage increased 88%, teen employment fell by a third.
What's more, the editors argue that there's something more sinister at play. Minimum wage hikes consistently gain the support of Congressional Democrats and their union allies. They say that they're needed to ostensibly help bolster the wages of the working poor. But of all full-time workers (those working a 40-hour or more work week), only 1.1% earn the minimum wage.
The editors say that when the "overwhelming" body of scientific evidence stands athwart the machinations of one of the Obama's administration's biggest lobbies, this evidence is cast by the wayside. Here's a sample:
![[Slide+10+of+Lecture+4+Using+the+Supply+and+Demand+Model.jpg]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgTSs7ueNyawrd2lgJjyLkwRVX5y-iyTDC81l2Wp4JckfP5GG8I3n4ilroLs6e_DQNRNph_L8A26ScyANv65kR53H6Ygxx62r8bchOlB8vBLlfLQlNwStY03dDOl2VHXdNaIG1SWRULxHS-/s1600/Slide+10+of+Lecture+4+Using+the+Supply+and+Demand+Model.jpg)
An editorial in yesterday's Wall Street Journal argues that the increasing U.S. minimum wage has disproportionally hurt younger and lower-skilled workers. The teen unemployment rate now stands at 25.9%, its highest level since World War II. In Massachusetts alone, during the same period the minimum wage increased 88%, teen employment fell by a third.
What's more, the editors argue that there's something more sinister at play. Minimum wage hikes consistently gain the support of Congressional Democrats and their union allies. They say that they're needed to ostensibly help bolster the wages of the working poor. But of all full-time workers (those working a 40-hour or more work week), only 1.1% earn the minimum wage.
The editors say that when the "overwhelming" body of scientific evidence stands athwart the machinations of one of the Obama's administration's biggest lobbies, this evidence is cast by the wayside. Here's a sample:
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? Democrats prefer to cite a few outlier studies known to be methodologically flawed.Is the minimum wage really only "helping" union wages, while damaging the earning potential of a generation of U.S. workers as the editors say? Stanford University economist John Taylor says that there's an economics lesson in here:
"Teen employment"? That's the "more pernicious story"? I'm afraid the specter of roaming bands of unemployed teenagers, no doubt to a soundtrack featuring Miley Cyrus and assorted Disney stars, does not strike as much worry in my heart as it does in yours.
ReplyDeleteWhich brings me to that handy economics graph: it belongs more fully in high school economics classes than the real world, not only because it's simplistic and extremely basic, but because it may convince teenagers to study and work harder so they can avoid getting a job that pays anything near the min. wage salary, which remains woefully inadequate even now.
Gee, that's a long sentence. Hope you enjoyed it.
Ah, so it seems Berchmans wants to take the short view on this predicament. He and I don't see eye-to-eye on how the perils the lack of a solid work ethic in America's youth will hurt their long-term prospects. Coupled with the rising inability to find any work, the long view suggests that when these teens finally do enter the workforce, unrealistic expectations, lower productivity and lower wages will be part of their norm.
ReplyDeleteThe Financial Times published a series of stories not too long ago by some Captains of Industry. They share with us how a solid work ethic instilled in them as teens helped them become successful:
http://www.ft.com/cms/s/0/598dbeec-91d8-11de-879d-00144feabdc0.html
As for graphs compelling teens to study and work harder -- that would be welcome! Yet as Berchmans understands, American youth score lower with respect to math and science literacy when compared to their international rich-country counterparts. In light of this evidence, I just don't think they're paying that much attention in class.
http://nces.ed.gov/programs/digest/d08/tables/dt08_403.asp
Heck, I'd be happy just to have our youth finish what they start:
http://www.nytimes.com/2009/09/09/business/economy/09leonhardt.html