New Analysis: Teen Unemployment in Arizona Averaged 31.5 Percent in 2010
Seventh in the Nation, Arizona's Teen Unemployment Rate Up from 31.1 Percent in 2009
Publication Date: January 2011
Topics: Teen Unemployment
A preliminary analysis of Bureau of Labor Statistics data by the Employment Policies Institute (EPI) shows that teen unemployment averaged 31.5 percent in Arizona in 2010. That’s the seventh highest in the country, and up from 31.1 percent in 2009.
In states like Arizona, teens contended with extra barriers to employment because of an indexed state minimum wage.
“Last year, more than one in four Arizona teens were looking for work without success,” said Michael Saltsman, research fellow at EPI. “This tough job market isn’t just a product of the recession; minimum wage mandates are keeping teens out of work.”
By increasing labor costs, higher minimum wages force employers to raise prices or cut costs. With consumers unwilling to pay higher prices, employers cut back on customer service or move towards automation– meaning fewer hours and fewer opportunities for entry-level employees like teens.
New research from Dr. Joseph Sabia, a labor economist at West Point, finds that each 10 percent increase in the minimum wage decreases teen employment by 3.6 percent. Sabia also finds that, contrary to advocates’ claims, increases in the minimum wage have no positive effect on a state’s economy—and can even have a negative effect on certain industries that employ less-experienced employees.
Saltsman concluded, “It’s a new year, and with summer not so far off, Arizona legislators should focus on policies that create jobs for teens—not destroy them.”