Bad Jobs News for Black and Hispanic Teens In October Unemployment Figures
Lawmakers Should Reject Job Destroying Wage Increases
Publication Date: November 2004
Topics: Minimum Wage
Washington – While the nation enjoyed exceptionally strong job growth in the month of October, creating 337,000 new jobs, the nation’s least-skilled employees continue to suffer from high unemployment rates. October’s job report should be particularly sobering to voters in Florida and Nevada who recently passed increases in their state minimum wages. These hikes will only serve to make the employment situation for low-skill employees that much worse, as demonstrated on the website GatewayJobs.com.
In October, the national unemployment rate increased slightly from 5.4 to 5.5 percent. Teen unemployment, a common indicator of employment prospects in the low-skill market, now stands at 17.2%. Minority teens in our country, however, were hurt far worse. For the third straight month the unemployment rate for Hispanic teens increased, and it now stands at 19.7%. African-American teen unemployment is now at a shocking 34.5%, over 500% higher than the national unemployment rate. High school dropouts also continue to suffer disproportionately high unemployment. In October, these individuals faced an unemployment rate that was 50% higher than the rest of the nation.
On Election Day, voters in Florida and Nevada supported increases in the minimum wage to $6.15 an hour. These wage rates are also indexed to inflation. The vast majority of economic research shows that the negative effects of increases in the minimum wage are concentrated on the least-skilled employees in the economy. In particular, researchers from Cornell University found that groups such as African-American young adults and high school dropouts suffer four times more employment loss from a minimum wage increase than their counterparts.
The recently passed minimum wage increases will make life more difficult for a subset of Americans who are struggling to cross the gateway into the labor market. Once they are employed, these relatively low-skill and inexperienced employees are able to enjoy significant wage gains. These wage gains result from their increased skill levels and demonstrate the well known fact that employment is the best anti-poverty program in existence.
“With seven out of eight individuals in poverty either not working or not working full-time, it is clear that the nation should focus on programs that increase employment opportunities—not mandated wage increases that make life more difficult for our nation’s most vulnerable employees,” said EPI Research Director Craig Garthwaite.
Gatewayjobs.com, a website focusing on the crisis in entry-level employment, provides regularly updated statistics detailing the employment market for entry-level employees and vital information about a host of government assistance programs designed to promote employment and economic success.