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Youth

Teen Unemployment in Washington: The Hidden Consequences of Higher Minimum Wages

Strategic Insights

— 2 min read

As of April 2010, the average unemployment rate for teens in Washington was a staggering 32.7 percent, the seventh highest in the country, according to a new analysis of Bureau of Labor Statistics data by the Employment Policies Institute. The economists point to the devastating consequences of the worst economic downturn since the Great Depression, combined with increases in state and federal minimum wages. In May 2010, the overall unemployment rate in Washington stood at 9.1 percent, a marginal decrease from the 9.3 percent recorded in April 2010. Research fellow at the Employment Policies Institute, Michael Saltsman, warns that more than one in four teens in Washington are struggling to find employment, and it is not just the recession that is to blame.

Key Takeaways:

  • The average unemployment rate for teens in Washington was 32.7 percent as of April 2010, the seventh highest in the country (Bureau of Labor Statistics, analyzed by Employment Policies Institute).
  • Economists attribute the high teen unemployment rate to the worst economic downturn since the Great Depression and increases in state and federal minimum wages.
  • A study from Ball State University found that the 40 percent increase in the federal minimum wage between July 2007 and July 2009 led to the loss of 310,000 teen jobs.
  • Higher minimum wages force employers to raise prices or cut costs, resulting in consumers pinched by the recession being unwilling to pay a higher price, and employers cutting back on customer service.
  • The least-skilled and least-experienced teens are hit hardest by increases in the minimum wage, resulting in them missing out on valuable career skills from their first job.
  • Without swift action from state and federal legislators to create a lower starting wage for teens, the consequences may lead to a lost generation of youth.

Statistics:

  • **32.7%**: The average unemployment rate for teens in Washington as of April 2010 (Bureau of Labor Statistics, analyzed by Employment Policies Institute).
  • **40%**: The increase in the federal minimum wage between July 2007 and July 2009, which led to the loss of 310,000 teen jobs (Ball State University study).
  • **310,000**: The number of teen jobs lost due to the 40 percent increase in the federal minimum wage between July 2007 and July 2009 (Ball State University study).
  • **9.1%**: The overall unemployment rate in Washington in May 2010 (Bureau of Labor Statistics).
  • **9.3%**: The overall unemployment rate in Washington in April 2010 (Bureau of Labor Statistics).

Sources:

  • Employment Policies Institute
  • Bureau of Labor Statistics
  • Ball State University

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