New Analysis: Teen Unemployment in California Averaged 34.4 Percent in 2010

Second in the Nation, California's Teen Unemployment Rate Up from 32.8 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 34.4 percent in California in 2010. That’s the second highest in the country, and up from 32.8 percent in 2009.

In states like California, a proposed 2011 increase in the state minimum wage threatens to make the situation even worse.

“Last year, more than one in three California 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, California legislators should focus on policies that create jobs for teens—not destroy them.”