Teens And Minimum Wage

Posted on June 29, 2010

Even as the overall employment picture in Illinois improves, the job market for teens remains bleak. A recent analysis from the Employment Policies Institute estimates that the unemployment rate for Illinois’ teens is averaging 27.5 percent – the 13th highest in the country.

One important reason for this dismal employment picture is minimum wage mandates that create a barrier between teens who want to work and employers who want to hire them.

Between July 2007 and July 2009, Congress raised the federal minimum wage 40 percent. Recent research from Ball State University attributes the loss of 310,000 teenage part-time jobs to this wage hike. The upcoming minimum wage increase in Illinois, which will raise the state’s minimum wage to third-highest in the country, threatens to have a similarly harmful effect.

As consumers in Illinois continue to demand low prices, employers respond by cutting staff hours or positions and are forced to turn to more cost-effective alternatives like automation and self-service.

Legislators in Illinois could do teens a favor by lowering the minimum wage, not raising it. Otherwise, the state will join their counterparts in other high minimum-wage states like Washington and Oregon – where teen unemployment is currently averaging over 30 percent.

Michael Saltsman
Research Fellow at the Employment Policies Institute