It appears that I wasn’t alone when I noticed the correlation between high teenage unemployment and the minimum wage increase.
According to economist David Neumark of the University of California at Irvine, for every 10 percent increase in the minimum wage, employment for high school dropouts and young black adults and teenagers falls by 8.5 percent. In the past 11 months alone, the United States’ minimum wage has increased by more than twice that amount.
So it should be no surprise to see teen jobs disappearing or to hear bleak testimony from employers across the country that make these hiring decisions.
In Massachusetts, the Boston Youth Fund will put 3,600 teenagers between 15 and 17 years old to work this summer, but the ratio of applicants to jobs is more than 2-to-1. The state has seen a 33 percent decline in teen employment over the past eight years. It’s no coincidence, then, that in the same time period the state’s minimum wage has soared.
This isn’t news to me, but it’s just another example how clear economic theory is ignored by the panderers in Congress.
There’s no end to the economic data that confirm these common-sense observations. Research from the University of Georgia, the University of Connecticut and Cornell University indicates that increasing the minimum wage causes four times more job loss for employees without a high school diploma than it does for the general population.
Furthermore, minimum wage hikes don’t effectively target the people who are typically portrayed as the key beneficiaries — low-income adults raising kids. According to U.S. Census Bureau data, just 14 percent of those who benefited from the most recent federal minimum wage hike are sole earners in families with children.
The real reason the minimum wage continues to be an issue is because labor unions base their contracts on the rate. Since the Democrats are beholden to unions they keep advocating the minimum wage to keep their base happy.
correlation is not causation.
The real reason that the minimum wage continues to be an issue is that it is a “feel good” legislative initiative that has very little impact on the job market and the American economy as a whole. Sure, unions like it and some even baseline their own wage structure to it, but given the rapidly shrinking pool of union represented workers, the unions’ grip on Congress is less and less and the blame the union rhetoric seems more and more of a straw man every year.