Send Us Hatemail ! mailbag@conservativecave.com
0 Members and 1 Guest are viewing this topic.
Mean To TeensBy INVESTOR'S BUSINESS DAILY | Posted Monday, June 09, 2008 4:20 PM PT Economy: When Democrats in Congress finagled a jump in the minimum wage last year, they crowed about their victory. Now Americans are finding out what it cost as the unemployment rate shoots up.Wall Street was stunned when the U.S. jobless rate jumped to 5.5% in May from 5% in April. Had things gotten so desperate so suddenly? Or was something else at work?As it turns out, it seems the problem was that hundreds of thousands of youths poured onto the job market at the same time, thanks to the end of the school year. But many, if not most, won't find jobs. They've been priced out of the market.The minimum wage was hiked 14% to $5.85 an hour last July. Next month, it will go up an additional 12% to $6.55 an hour. In July 2009, it's slated to rise 10.7% to $7.25 an hour.If that sounds like a lot, the actual cost is much higher after you fold in taxes, benefits and Social Security that businesses pay on behalf of young workers.It should surprise no one that youth unemployment is rising. When you raise the cost of anything, you'll demand less of it. That's true in the labor market, especially since young workers are the least educated, least trained and overall least productive of all workers.If you have to shell out an added 40% over three years to employ those unproductive workers, as is now happening, you'll likely find a good reason not to do so — unless it's absolutely necessary.Economist David Neumark of the University of California, Irvine, has found a 10% minimum wage hike cuts employment of young, unskilled workers by 8.5%. As Kristen Lopez Eastlick of the L.A. Examiner noted, "In the past 11 months alone, the U.S.' minimum wage has increased by more than twice that amount."We're not against young people getting paid more. We just think it should happen after they work a while, gain some experience and actually become valuable to their employer — rather than having higher pay mandated by the federal government, which has no idea what an individual employers' needs are.Look at the chart above. Those two age groups make up 53% of all minimum wage employment. Recent minimum wage hikes are a big reason teen joblessness is at its highest level in 60 years.
