Teen Unemployment Skyrocketing in Weak Economy

Mandated Minimum Wage Hikes Have Exacerbated the Problem
  • Publication Date: May 2009

  • Topics: Minimum Wage, Teen Unemployment

WASHINGTON D.C. – Employment data continues to show an upward trend in unemployment for American teenagers as it has reached the highest rate in 17 years this spring. The teen unemployment rate is currently at 21.5 percent, 6.1 percentage points higher than at this time last year. African-American teen unemployment is at 34.7 percent, a ten point spike from this time last year.

A spokesman from the Employment Policies Institute (EPI) is available to discuss how public policy issues have impacted this dramatic rise in teen unemployment.

“The weak economy is combining with high mandated wage levels to create the perfect storm of unemployment for less experienced groups like teenagers.” said Kristen Lopez Eastlick, Senior Research Analyst for the Employment Policies Institute.

Overwhelming amounts of economic research predicted that there would be an increase in job losses for teens and other vulnerable groups as a result of the 2007 Federal Minimum Wage legislation.

When looking at job loss during a good economy, research from the University of California-Irvine found that negative effects of wage hikes are overwhelmingly concentrated on the most vulnerable employees, particularly young minorities and high school dropouts. Research from the University of Georgia found that every 10 percent increase in the minimum wage was associated with a 4.6 to 9.0 percent decline in teenage employment in small businesses. In a weakening economy, these vulnerable employees won’t have many options available.

“The unintended consequence of the federal minimum wage hike is pricing some employees out of the workforce, and based on the recent unemployment data, it’s teens – minority teens especially – who are getting hit the hardest,” Eastlick continued. “A job for a young employee is a chance to gain important skills and learn the invisible curriculum that comes from being employed. Unfortunately many teens will be denied the opportunity to learn the skills that come with having a first job because of bad policy implemented by a misguided Congress.”