New EPI Analysis Shows Teen Unemployment Rate Averages 34.2 Percent in California
At Third Highest in the Country, EPI Points to Consequences of Recession and Minimum Wage Hikes
Publication Date: June 2010
Topics: Teen Unemployment
WASHINGTON, DC – A new EPI analysis of Bureau of Labor Statistics (BLS) data estimates that the average unemployment rate for teens in California was 34.2 percent as of April 2010 – the third highest in the country. Economists point to the consequences of the worst economic downturn since the Great Depression, and increases in state and federal minimum wages.
BLS data also show that the overall unemployment rate in California was 12.4 percent in May 2010, from 12.5 percent in April 2010.
“More than one in four teens in California is looking for work without success, and it’s not just because of the recession,” said Michael Saltsman, research fellow at the Employment Policies Institute. “This summer, minimum wage mandates are keeping teens from finding a job.”
Economists confirm the harm caused by minimum wage hikes. Most recently, a study from Ball State University attributed the loss of 310,000 teen jobs to the 40 percent increase in the federal minimum wage between July 2007 and July 2009.
By increasing labor costs, higher minimum wages force employers to raise prices or cut costs. Consumers pinched by the recession aren’t willing to pay a higher price, so employers cut back on customer service instead – meaning fewer hours and fewer opportunities for entry-level employees like teens.
“It’s the least-skilled and least-experienced that are hit hardest as a result of increases in the minimum wage,” Saltsman continued. “They’re missing out on the valuable career skills that come from a first job.”
“Without swift action from state and federal legislators to create a lower starting wage for teens, we’re going to create a lost generation of youth – more likely to drop out of high school, or get wrapped up in the criminal justice system.”