OECD Report Recognizes Minimum Wage As A Worldwide Barrier To Teen Employment

Employment Policies Institute Points To Broad Consensus On Wage Hikes
  • Publication Date: April 2010

  • Topics: Minimum Wage

WASHINGTON, D.C. – A newly released report from the Organization for Economic Cooperation and Development (OECD) calls attention to the elevated level of teen unemployment that countries around the world are facing. OECD points to high minimum wages as one barrier preventing teens from finding a job.

Michael Saltsman, research fellow for the Employment Policies Institute, responded. “This should be a wake-up call to our Representatives in Congress. The OECD’s conclusion echoes the broad consensus – that minimum wage hikes hurt the most vulnerable in the job market – established by decades of economic research.”

Recent domestic research from Ball State University made clear that the 40 percent increase in the minimum wage that took place between July 2007 and July 2009 was partly responsible for our teen jobs crisis.

“Some in Washington still fail to acknowledge basic economic principles,” Saltsman continued. “By passing legislation to spend $600 million on summer jobs, Congress is simply papering over the damage caused by minimum wage hikes.”

Minimum wage hikes increase the cost to hire and train teens that are just getting their start in the job market, as the OECD recognized. In response, employers slash hours, or hire fewer teens. Over time, many of these entry-level positions may disappear for good, as employers replace “full-service” with “self-service.”

“The OECD has no partisan axe to grind; they just want teens to find jobs,” Saltsman concluded. “Congress should follow their lead, and reconsider the high minimum wage that’s keeping teens out of the workforce and the opportunity to gain a first job.”