California Unemployment Rate Rises To 12.6 Percent
EPI Analysis Finds Recession, Wage Mandates Combine To Triple Long-Term Teen Unemployment
Publication Date: April 2010
Topics: Teen Unemployment
WASHINGTON, D.C. – New data released today by the Bureau of Labor Statistics (BLS) shows that California’s March 2010 unemployment rate was a record-high 12.6 percent, rising from 10.6 percent in March 2009.
An Employment Policies Institute (EPI) analysis of recent BLS data found that the job market has grown challenging for teens in particular, with a dramatic 174 percent increase over the last three years in the number of unemployed teens spending 6 months or more looking for work.
“The recession, combined with state and federal minimum wage increases, has created a toxic environment for young Americans searching for a summer job,” said Michael Saltsman, research fellow at EPI.
As of March 2010, 30 percent of all unemployed teens had spent 6 months or more searching for a job. In 2007, on average, only 10 percent of unemployed teens spent that long looking for work. The full analysis is available here.
Minimum wage hikes – like the 18 percent increase in California’s minimum wage between January 2007 and January 2008 – raise the cost of hiring and training entry-level employees. In response, employers are reducing the number of low-wage jobs they offer, or gradually moving to automated, self-service systems.
One recent study from the University of New Hampshire found almost three-quarters of economists surveyed in agreement that more mandated wage hikes mean fewer entry-level jobs.
“As far back as the 1940s, economists understood that minimum wage increases are job killers, especially for teens with less experience,” Saltsman concluded.
“But because of politicians who choose to embrace populist sound bites instead of sound economics, a whole generation is missing out on the critical skills learned in a first job.”