New Analysis: Teen Unemployment in Indiana Averaged 27.7 Percent in 2010

Fourteenth in the Nation, Indiana's Teen Unemployment Rate Up from 21.3 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 27.7 percent in Indiana in 2010. That’s the fourteenth highest in the country, and up from 21.3 percent in 2009.

In states like Indiana, teens contended with extra barriers to employment because of a 40 percent increase in the federal minimum wage between 2007 and 2009.

“Last year, more than one in four Indiana 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.

Recent research from economists David Macpherson (Trinity University) and William Even (Miami University) shows that the federal wage increase was particularly harmful for Indiana. Over 7,000 fewer teens were employed as a direct result of the federal wage mandate.

Saltsman concluded, “It’s a new year, and with summer not so far off, Indiana legislators should focus on policies that create jobs for teens—not destroy them.”