NYT: Minimum wage increase walloped teenaged employment.
It wasn’t long ago (earlier this year) that arguing against the minimum wage was met with the charge that one was a heartless bastard who wanted the poor to suffer. The suggestion that a high minimum wage meant that the unskilled would be priced out of any job whatsoever was rejected: “Better no job than an under-paid one”, was the philosophy. Well, that’s what we have. Who’s the heartless bastard now?
Teenage employment has fallen sharply since July. The most recent minimum wage hike may be an important factor.
Many economists expect the minimum wage, if it has any effect, to (among other things) raise employer costs and therefore reduce employment, especially among those who are likely to work in minimum-wage jobs, like teenagers and restaurant workers.
In July 2007, the federal minimum hourly wage was increased for the first time in 10 years, from $5.15 to $5.85. It was increased again a year later to $6.55, and increased yet again this July to $7.25.
Because the minimum-wage law still permits employers to pay more than the minimum, economists agree that a low minimum wage has smaller effects than a high minimum wage. The inflation-adjusted federal minimum wage had gotten to its lowest in decades by early 2007, so the July 2007 increase should have had the smallest effects of the three.
The July 2009 increase should have the largest effect, because the combination of the two previous hikes and some deflation ($6.55 bought more in June 2009 than it did the previous summer) had already gotten the inflation-adjusted minimum wage relatively high.
A seasonally adjusted index of the number of
16- to 19-year-olds with jobs, with July 2009 as the benchmark. That group is especially likely to be affected by minimum-wage legislation.The chart below shows a seasonally adjusted index of the number of
16- to 19-year-olds with jobs. That group is especially likely to be affected by minimum-wage legislation. Of course, this is a recession period in which employment has been falling for essentially all groups, so for reference the teenage percentage has been converted to an index by dividing by the percentage for all people, with July 2009 set as the benchmark (i.e., the teenage employment rate that month has been set to 100).
Bigger scam of dumb parents and kids is un/underemployment rate of ’09 grads of colleges, incl the allegedly elitist ones that only have best and brightest kids
Employers like Goldman and Google don’t seem to agree…and are voting with their hiring (or lack thereof)
So someone wants to work at a low wage to get experience and knowledge and skills? Someone would prefer to be able to earn $5.25 an hour than the nothing that an employer can afford to pay with mandated higher wages?
Screw ‘em. Democrats KNOW what is good for you! Who cares what YOU think is good for you…
Liberal fascism, indeed.
the real importance of the minimum wage to the demmerkrats is that it is the basis of most union wage scales. e.g. an apprentice for a certain union will start at 2x minimum wage, a journeymant at 3.5x, a member of certain public employee unions will start at 3.5x minimum wage, etc.
so a boost in the minimum wage is a leveraged pay hike for the unions.
of course the demmerkrats have done a great job of hiding this fact behind the sob stories of folks who actually have to scratch out a living at those levels.
they have done an equally good job of hiding the fact that the payoff to their union pals screw the very real folk in their sob stories and the youngsters who can’t get jobs.
Bring back sweatshops. Just not in my backyard.
I agree with Peg as I often do. Earlier on this blog, I mentioned that, right after college, I took a job in a somewhat complicated area with a City government for reasons other than pay. Sure, I would have rejected something too low but the pay was barely acceptable, they asked nothing in terms of wardrobe and haircuts, mostly, I got true and valuable experience. I was no longer a teenager (just barely) but they couldn’t have added me and the other guy if the salaries had been real high. For me, I figured out this was not my life but, a couple of years ago, I ran into the other guy and he’s still there (hopefully with some upgrade in salary.) I did not feel abused in any way. I felt kind of lucky.