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Pasco County News | Breaking News

Key reason for high teen unemployment eludes MSNBC.com

Posted Aug 12, 2010 by Tom Jackson

Updated Aug 12, 2010 at 03:16 PM

Over at MSNBC.com, Contributor Megan L. Thomas describes this season as something other than a sunny “Summer of Recovery” for teens hungry for work.

It’s been a long, frustrating summer for employment-starved teens. And most unemployed adolescents will struggle to find work at least until the holiday season, the latest data suggests.

The employment picture has been bleak across the board, but it’s been particularly tough on teens. The U.S. unemployment rate was 9.5 percent last month, but for teens it hit 26.1 percent — and July is typically the peak of the summer employment season for teens. It marked the worst summer hiring season for teens since 1949, according to an analysis by Challenger, Gray & Christmas, an outplacement firm.

Part of the problem: Teens are facing unusually heavy competition from millions of older workers, many of whom have been unemployed for months or longer.
“The teens are facing heavy competition, from people in their early 20s particularly, who are taking some of those better teen jobs that usually they leave alone,” said John Challenger, CEO of Challenger, Gray. …

And it does not look like the odds will be improving any time soon for teens. U.S. job openings fell for the second straight month in June and and are expected to continue dropping, according to the government’s Job Openings and Labor Turnover survey released Wednesday.

OK, so part of the problem is “unusually heavy competition.” And another part of the problem … ? Contributor Thomas begs the question, then leaves us dangling, prattling on for another 14 paragraphs without so much as a hint of what learned economists regard as fundamental to high teen unemployment.

For the answer, we turn to the Wall Street Journal and its July 24 editorial, “The Young and the Jobless” (subscription required).

Today marks the first anniversary of Congress’s decision to raise the federal minimum wage by 41% to $7.25 an hour. But hold the confetti. According to a new study, more than 100,000 fewer teens are employed today due to the wage hikes.

Economic slowdowns are tough on many job-seekers, but they’re especially hard on the young and inexperienced, whose job prospects have suffered tremendously from Washington’s ill-advised attempts to put a floor under wages. In a new paper published by the Employment Policies Institute, labor economists William Even of Miami University in Ohio and David Macpherson of Trinity University in Texas find a significant drop in teen employment as a direct result of the minimum wage hikes.

Contributor Thomas dances furiously, whipping up a pageant of unrelenting woe for idled teens, many of whom are suffering pangs of guilt because they are unable to help out their unemployed parents.

Dennis Amon, a 16-year-old from Indiana, wants work to help his family. His mother was recently laid off as a bank teller and his father’s pay is stretched just covering expenses. His family will sometimes eat only popcorn as they struggle to pay the bills, he said. Amon has searched for work for roughly a year without success but is still hoping for a job so he can pay for his basic necessities and save for college.

We’re not just talking about an economic crisis, either. There are social ramifications …

For teens, work can be more than just a paycheck, according to a July report from the Center for Labor Market Studies. Teens who work in high school are less likely to drop out before graduation. The cumulative work people do in their teens can also result in a positive impact on the employment, wages and earnings they have in their 20s, the report found.

… not to mention a cascade effect:

In addition, teens unable to get work today are more likely to have trouble finding employment in the future. Low-income teens living in areas with fewer job opportunities have a greater likelihood of engaging in delinquent behavior. Areas with fewer jobs also tend to have higher rates of teen pregnancy as well.

“We subscribe to the notion that idle hands are the devil’s workshop, and I think that’s particularly true for a lot of economically disadvantaged teens, which is a group of teens that has some of the lowest employment rates,” McLaughlin said.

And yet, on the topic of how best to reverse this dismal, but eminently curable, circumstance (sound of crickets chirping). Again, the Journal:

After isolating for other economic factors and broadening their analysis to include all 32 states affected by any stage of the federal wage increase, the authors conclude that “the federal minimum-wage hikes reduced teen employment by 2.5% translating to approximately 114,400 fewer employed teens.”

Minimum wage proponents often claim that a higher wage floor will reduce poverty, ignoring that most minimum wage earners aren’t poor. “A small fraction of minimum-wage workers are the sole breadwinner for their family,” said Mr. Macpherson in an interview. “Historically, the number is one-in-six. So five-in-six are either secondary earners, or kids living with mom and dad, or kids living alone, such as college students.”

Research by economists David Neumark and William Wascher has shown that minimum wage hikes also fail as an antipoverty measure because workers who receive the higher wage are counterbalanced by others who get laid off. Minimum wage laws are especially detrimental to black workers, who tend to be less experienced or have been trapped in failing public schools. The overall teen unemployment rate in June was 25.7%, versus 39.9% for black teens.

The NAACP and Congressional Black Caucus have been busy of late calling for various groups and government officials to apologize for perceived racial slights. Their energies would be put to better use urging the White House and Congress to lower the federal minimum wage, or at least to install a sub-minimum for teenagers. Our guess is that blacks of all ages would prefer a job to an apology.

And we’re guessing here they’d rather not have to wait.