New Statistics Show Tennessee Unemployment Has Increased 88 Percent in Five Years

Tennessee Teens Also Hurt by Recent Increases in the Minimum Wage
  • Publication Date: March 2010

  • Topics: Minimum Wage, Teen Unemployment

WASHINGTON, DC – New employment data released today by the Bureau of Labor Statistics (BLS) show that Tennessee’s unemployment rate has increased 88 percent in the last five years, from 5.7 percent in 2005 to 10.7 percent in 2010.

BLS data also shows that teens in Tennessee are having an increasingly hard time finding work. Teen unemployment in Tennessee averaged 28.5 percent in 2009; in 2005, that number was only 19.2 percent.

“The recession may be ending, but the recovery has yet to trickle down to young Americans,” said Michael Saltsman, research fellow at the Employment Policies Institute.

The rise in teen unemployment was caused in part by a 40 percent increase in the federal minimum wage between July 2007 and July 2009.

Faced with higher labor costs from a minimum wage increase, employers can either slash the number of low-wage jobs they offer, or hire applicants with higher skill levels. Either way, the door for employment is effectively shut for many teens searching for that all-important first job.

“In this tough economy, teens need experience even to compete for jobs that are traditionally entry-level,” Saltsman continued. “But increases in the minimum wage put many of those jobs out of reach for teens new to the job market.”

Studies and surveys of economists as far back as the 1940s echo these findings. Most recently, in 2007, the University of New Hampshire found 73 percent of labor economists agreed that a mandated minimum wage hike decreases the number of entry-level employees hired.

Research from Northeastern University found that teens without job opportunities — especially economically disadvantaged teens — are also more likely to drop out of high school or get tangled up in the criminal justice system.

Saltsman concluded: “With summer just around the corner, it’s time for policymakers to roll back wage mandates that keep our teens out of work and unoccupied.”