Do Minimum Wage Requirements Add To Teen Unemployment?

DATA

July 17, 2012 | 3:01 PM

By Emilie Ritter Saunders

Molly Messick / StateImpact Idaho

We spoke with Stephen Berry back in March as he was searching for a job.

A report by the conservative-leaning Idaho Freedom Foundation concludes Idaho teens have fewer job opportunities because the state’s minimum wage has increased by $2.10 since 2007.

“There may well be multiple reasons why unemployment has risen so quickly among teens, but the one that cannot be overlooked is the rapid increase of the minimum wage. Between 2007 and 2009 the federal minimum wage increased from $5.15 an hour to $7.25 an hour. This represented a 41 percent increase during a period that included the beginning of a major economic downturn. It is unsurprising that such a dramatic increase in the baseline cost of labor led to an equally dramatic decline in the demand for it. Recent research and analysis have found that in 2011 over 2,000 additional Idaho teens would have been employed if the minimum wage had not been increased.” – Idaho Freedom Foundation

That stat the Freedom Foundation cites comes from a 2010 report by the Employment Policies Institute, a Washington, D.C. based think-tank.

Idaho’s Department of Labor spokesman isn’t convinced of the link between high teen joblessness and the increased minimum wage.

“The competition for job seekers with no previous work experience is intense,” said Bob Fick from IDL. He considers the impact of the minimum wage on unemployment “negligible,” but admits that “the number of companies that have typically had job fairs in the spring to hire for the summer has been off dramatically since the recession began.”- IdahoReporter.com

Here’s a side-by-side look at the states (plus Washington, D.C.) that recorded the highest teen unemployment rates in 2011 (Teens are defined as 16 to 19-year-olds), compared with that state’s minimum wage as of January 2012. The data in the table comes from the U.S. Department of Labor.

Rank	State	2011 Teen Unemployment Rate	Minimum Wage
1	California	35.2%	$8.00
2	Missouri	32.7%	$7.25
3	North Carolina	32%	$7.25
4	Nevada	31.9%	$7.25-$8.25
5	Washington	30.4%	$9.04
6	Idaho	29.9%	$7.25
7	Oregon	29.7%	$8.80
8	Georgia	29%	$5.15
9	Rhode Island	29%	$7.40
10	Tennessee	28.8%	N/A
	District of Columbia	46.7%	$8.25

Source: U.S. Department of Labor

Tennessee gets a ‘N/A’ because it doesn’t have a minimum wage requirement.

Do you think minimum wage requirements make it tougher for a teen to get a job? Let us know in the comments section below.

Topics

Tracking Idaho’s Unemployment Rate

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Comments

pylon shadow

Hi Emilie,

The Reno Gazette Journal did a thorough fact check on the topic here:

http://blogs.rgj.com/factchecker/2012/07/01/is-nevadas-minimum-wage-to-blame-for-teen-job-losses/

The 2010 report by the Employment Policies Institute cites Michael Hick’s non-peer reviewed study. When contacted by the reporter Hicks grudgingly admitted there was no evidence to back up the claim that minimum wage levels were affecting teen employment!

So way is this report being peddled to news outles? Employment Policies Institute sounds like a credible think tank. Actually it is a front group that represents fast food chains with a stake in keeping labor as cheap as possible so as not to cut into those record high corporate profits.

From Sourcewatch:” EPI has has been widely quoted in news stories regarding minimum wage issues, and although a few of those stories have correctly described it as a “think tank financed by business,” most stories fail to provide any identification that would enable readers to identify the vested interests behind its pronouncements. Instead, it is usually described exactly the way it describes itself, as a “non-profit research organization dedicated to studying public policy issues surrounding employment growth” that “focuses on issues that affect entry-level employment.” In reality, EPI’s mission is to keep the minimum wage low so Berman’s clients can continue to pay their workers as little as possible.”

ersaunders

Thanks for the information.

http://www.facebook.com/people/Jon-Henry/100000593330440 Jon Henry

Thanks pylon – it is always nice to know who is providing the info.
Scott DeLisio

I am a small business owner and I own coffee shops in Washington State. We employ 12 people with age ranges of 18-29 yrs old. When we opened in 2007 almost all of our employee’s were under 21, now most of them are over 21. Our minimum wage is currently $9.04 and has climbed sharply over the last few years as our economy has struggled. Our costs of everything have increased substantially over the same period. Unfortunately, it is difficult to raise prices in an increasingly competitive environment and most of these cost increases have been absorbed. We started out by hiring young, inexperienced people that we could train to do things the right way. Now we cant afford to hire anyone without experience because it costs about $1000.00 in training pay before they can be self sufficient enough to work a shift by themselves. As wages increase again in January 2013 to $9.19, we probably will finally need to raise prices. If we do and our competitors don’t, we may see less revenue come in. less revenue means hours get cut and they lose the tip income that comes with higher volume. A lower minimum wage would allow us to hire more employee’s, stay open longer giving more hours to our employee’s and we could again train younger workers that are entering the work force. Minimum wage law guarantee’s that an entry level position will require experience. Isn’t that what an entry level job is supposed to provide? When was a minimum wage job ever meant to support a family on? It is supposed to be an entry point for people to get introduced to the work force, gain some skills and then move up. By raising Minimum wages, we force more people into welfare and trap them there.

CyncialOne

Yes paying more for better, smarter employees in a field where brains are important (like Baristas), is always a good idea. If you are really trying to pay minimum wage your begging for inferior workers.
Minimum wage jobs like the one you offer is the only option for millions of displaced auto workers, steel workers, construction workers, teachers, etc. And it sounds like you won’t even consider hiring people that have kids to feed. What’s up with that?

CyncialOne

Why would they quote the EPI? It’s well know to be a right-wing lackey run by a right wing lobbyist and they have a long history of problems with the truth.? Is the NPR going all right wing on us now?
kimmia frank

this is stupid you dumb fucks
kimmia franklin

im a terrorist im going to bomb up colorado and fuck obama mom and wife n daughter and lynch all white people and kut off the men balls and women titties and rape all little kids

ms.lesley

me to

kyle webb

i hav a little wee i put it in kammia franklin everyday and i kiss blue waffle i hate asians niggas and red necks mr sasja had sex with jared rapei spred aids i like big buts and i kan not lie i lost

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