Are summer jobs ‘Going Out of Business’?

  • Author: Kristen Lopez Eastlick

  • Publication Date: July 2009

  • Newspaper: Charleston Gazette

  • Topics: Minimum Wage, Teen Unemployment

Do you remember your first job interview? Perhaps you had your heart set on a summer job as a lifeguard, waitress or movie attendant. Hopefully this stress-inducing experience happened for the first time when you were a teenager, giving you the opportunity to tune up your interview skills. And once you secured that first job, you learned valuable, hands-on skills such as reporting to a supervisor, working in teams and steering clear of office politics! This is part of the “invisible curriculum” that can’t be taught out of a book.

Unfortunately, this summer many West Virginia teens have found the job market to be a difficult nut to crack and were denied the opportunity to learn valuable job skills that will make them more employable in the future. New employment data released July 2 show just what economists (and parents of teenagers across the country) feared – the bad economy and increasing federal minimum wage have had a disastrous effect on teens looking for jobs this summer.

Unemployment for America’s teens reached the highest rate in 17 years this spring and continued to climb over the summer. The national teen unemployment rate is currently at 24 percent, a nearly 12 percent increase from earlier this summer and 2.5 times the national unemployment rate. West Virginia ranks 42nd in the country in teen unemployment. The state’s teen unemployment rate was 13.4 percent in May 2009, according to the U.S. Bureau of Labor Statistics. African-American teen unemployment is at 37.9 percent nationwide, four times the national unemployment rate. National African-American teen unemployment has increased by more than 27 percent in one year.

Economic research has shown time and again that increasing the minimum wage does little to address poverty. Research from American University and Cornell University shows that the state minimum wage hikes that took place from 2003 through 2007 did nothing to reduce poverty rates. Wage hikes do, however, destroy teen jobs. A study from the University of Georgia in 2006 found that every 10 percent increase in the minimum wage was associated with a 4.6 to 9 percent decline in teenage employment in small businesses. This prediction proved true last summer, as the 12 percent minimum-wage hike corresponded with a 5 percent employment drop for teens. This year, employment opportunities for teens continued to dry up in the summer sun.

For vulnerable teens, not gaining entry-level job experience can have a long-term impact. A study out of Stanford University found that teens experiencing especially long periods of unemployment were particularly prone to negative long-term effects on future wages and employment. Research from the University of North Carolina-Chapel Hill found that unemployment for teens continued to adversely affect earnings for as long as 10 years.

When the minimum wage climbs, employers seek applicants with job experience because they are more likely to be worth the higher pay. Companies who previously would have taken a chance on young workers become less willing to do so, and entry-level workers are shut out of the job market.

Lessons teens learn in their first job are not easily taught in a classroom. From learning customer service skills to punching a time card, the job experience teens acquire sets them up for future success – translating into promotions and raises that outpace any minimum-wage hike.

This summer, a struggling economy and skyrocketing minimum wage continued to devastate the entry-level job market, continuing a three-year decline in teen employment. After another restless and unproductive summer for millions of teens across the country, hopefully policymakers will come to the same conclusion those teens did a while ago: A first job at the current minimum wage is much better than no job at all.

Eastlick is the senior economic analyst at the Employment Policies Institute, which studies entry-level employment.