New Analysis: 25.3 Percent of Teens in Indiana Looking for Work for Six Months or More

Research Shows Increases in the Minimum Wage Hurts Teen Employment
  • Publication Date: September 2010

  • Topics: Teen Unemployment

WASHINGTON – Today, the Employment Policies Institute (EPI) released a new analysis of Census Bureau data that shows teens in Indiana are having an especially hard time finding work. As of August 2010, 25.3 percent of Indiana teens had been searching for a job for six months or more, on average. Nationally, the average was 23.5 percent.

A recent study by economists William Even of Miami University and David Macpherson of Trinity University provides one contributing factor. Controlling for economic conditions, the authors found that the 40 percent increase in the federal minimum wage between July 2007 and July 2009 resulted in at least 144,000 fewer employed teens.
A policy brief describing the study’s findings is available here: http://epionline.org/studies/even_07-2010-brief.pdf

“While raising the minimum wage is politically popular, the unintended consequences far outweigh the benefits,” said Michael Saltsman, research fellow at the Employment Policies Institute. “For teens in Indiana the dramatic increase in the federal minimum wage caused a 7.9 percent drop in employment.”

“Teens who are still unemployed are missing out on the career benefits that come from holding a part-time job while in school,” Saltsman continued.

“Research shows that high school seniors with a part time job can earn at least 20 percent more in future years than their counterparts who didn’t have a job.”
“The new school year is a great opportunity to make a new start,” Saltsman concluded. “Legislators should consider relaxing wage mandates that are shutting high school students and other young adults out of the labor market and help put Indiana teens back work.”