Senate Considering $600 Million in New Spending to Create Teen Jobs, Ignores Economic Fact

Economists Say Higher Minimum Wage Increases Teen Unemployment
  • Publication Date: May 2010

  • Topics: Minimum Wage, Teen Unemployment

WASHINGTON – Today, the Senate Committee on Appropriations is considering legislation – the Disaster Relief and Summer Jobs Act of 2010 (H.R. 4899) – that would spend $600 million to create summer employment opportunities for teens.

Michael Saltsman, research fellow at the Employment Policies Institute, responded:

To create jobs for our country’s 1.5 million out-of-work teens, Congress should reconsider current laws that discriminate against less-skilled applicants.

When the House of Representatives considered the bill in March, Speaker Pelosi claimed that $600 million in new government spending would support 300,000 summer jobs for out-of-work teens.

Yet, current research from Ball State University attributes the loss of over 300,000 teenage part-time jobs to the 40 percent hike in the minimum wage that took place between July 2007 and July 2009.

Economic research from as far back as the 1940s shows that mandated wage hikes are job opportunity killers, especially for teens without skills who are seeking experience in the workforce.

The solution to our teen unemployment crisis shouldn’t cost $600 million taxpayer dollars or require pages of legislative boilerplate. It’s simple – Congress needs to heed the advice of economists, and roll back wage mandates that price teens out of work place opportunities.