New Analysis: 25 States Still Have Teen Unemployment Rates Above 25 Percent

EPI Supports Training Wage Measures To Boost Teen Employment
  • Publication Date: April 2011

  • Topics: Minimum Wage, Teen Unemployment

An analysis of Bureau of Labor Statistics data by the Employment Policies Institute (EPI) shows that 25 states had teen unemployment rates above 25 percent, according to the most recent data available (see chart below). Nationally, the teen unemployment rate rose slightly to 24.5 percent in March 2011; the rate for black teens rose to 42.1 percent.

So far this year, five states have considered legislation to create a lower training wage to spur employment and outside the classroom learning opportunities for teens: Maine, Massachusetts, New Jersey, Oregon, and Washington.

“The statistics are devastating: Nationally, nearly one in four teens is looking for work without success,” said Michael Saltsman, research fellow at EPI. “With summer approaching, the creation of a lower training wage would be an excellent way to boost job opportunities for teens in hard-hit states.”

In recent years, a combination of minimum wage increases at the state and federal level have raised the cost to hire entry-level employees such as teens. Recent research from Dr. Joseph Sabia, a labor economist at West Point, found that each 10 percent increase in the minimum wage has reduced teen employment by as much as 3.6 percent.

By increasing labor costs, higher minimum wages force low profit margin 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 such as teens.

“Past research shows that teens without job opportunities are at a higher risk for dropping out of high school, or winding up in the criminal justice system,” Saltsman continued. “In light of these consequences, It’s time for state policy makers to recognize the barriers they’ve set up for entry-level employment and seek creative solutions including training and minor wages.”

“Twelve states are considering an increase in the minimum wage that could make it harder for teens to get a job this summer,” Saltsman concluded. “Instead, state policymakers should do young adults a favor this summer by lowering mandated wages and giving teens a chance to get their foot in the door.”

State Teen Unemployment, 12-month average as of Jan. 2011*

Rank — State — Teen Unemployment Rate

1 — Georgia — 37.3%

2 — California — 34.2%

3 — South Carolina — 33.3%

4 — Washington — 33.2%

5 — Nevada — 32.9%

6 — Mississippi — 32.6%

7 — Florida — 30.9%

8 — Arizona — 30.9%

9 — Alabama — 30.6%

10 — Michigan — 28.9%

11 — Oregon — 28.7%

12 — Arkansas — 28.3%

13 — Indiana — 28.2%

14 — New Mexico — 28.1%

15 — Connecticut — 27.8%

16 — North Carolina — 27.2%

17 — Hawaii — 26.9%

18 — Illinois — 26.8%

19 — Idaho — 26.8%

20 — West Virginia — 26.6%

21 — Tennessee — 26.3%

22 — Kentucky — 26.1%

23 — Rhode Island — 25.9%

24 — Montana — 25.8%

25 — New York — 25.4%

Source: EPI Analysis of Current Population Survey data

*Most Recent Month Available