Bummer Summer: 26 States Have Youth Unemployment Rates That Top 30 Percent
Over 20 jurisdictions will raise minimum wages July 1, exacerbating historically bad youth job market
Publication Date: June 2020
Washington, D.C. —A new analysis of Census Bureau data shows that youth unemployment rates rose above 30 percent in 26 states as of May. The teen jobless rate spiked to above 40 percent in seven states—New Jersey, Delaware, Colorado, Nevada, Illinois, and Connecticut—and to 63 percent in Hawaii.
The full list of state youth unemployment rates can be viewed here. The data is based on an analysis of Current Population Survey data, comparing youth employment in January-March of this year with the April-May period when Covid-related shutdowns were widespread.
The difficulties faced by entry-level employers will compound on July 1, when more than 20 states and localities raise minimum wages—with 15 areas raising the minimum wage to $15 per hour or higher. Several of those states raising wage rates already have a youth jobless rate about 30 percent.
The full list of states’ and localities’ July 1st minimum wage hikes can be found here.
The relationship between a higher minimum wage and higher youth joblessness is well-understood by economists. A 2018 Mercatus Center report from economists David Neumark and Cortnie Shupe identified a higher minimum wage as the “predominant factor” driving declines in youth employment since the early 2000s. Last year, a report from the Congressional Budget Office estimated the national impact of a $15 minimum wage, finding it would eliminate 600,000 teen jobs; that was in a healthy economic environment.
“Teen jobseekers face a historically bad summer job market, and the negative impacts on their career development might be long-lasting,” said Michael Saltsman, Managing Director at the Employment Policies Institute. “States and localities pushing ahead with minimum wage hikes are only causing further harm to the businesses that hire entry-level employees and putting job opportunities for those just starting out with their career further out of reach.”