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Youth

Teen Unemployment Reaches 17-Year High Due to Economy and Federal Minimum Wage Hike

Strategic Insights

— 1 min read

The recent employment data has confirmed the fears of economists and parents of teenagers that the bad economy and increasing federal minimum wage have resulted in a disastrous effect on teens looking for jobs this summer. The teenage unemployment rate has reached the highest rate in 17 years, standing at 24 percent, a nearly 12 percent increase from earlier this summer and 2.5 times the national unemployment rate.

Key Takeaways:

  • The teen unemployment rate has reached 24 percent, a nearly 12 percent increase from earlier this summer and 2.5 times the national unemployment rate.
  • African American teen unemployment is at 37.9 percent, 4 times the national unemployment rate.
  • National African American teen unemployment has increased by over 27 percent in one year.
  • The federal minimum wage hike is pricing some employees out of the workforce, especially minority teens.
  • A study by the University of California-Irvine found that the negative effects of wage hikes are overwhelmingly concentrated on the most vulnerable employees, particularly young minorities and high school dropouts.
  • Research from the University of Georgia found that every 10 percent increase in the minimum wage was associated with a 4.6 to 9 percent decline in teenage employment in small businesses.
  • A study out of Stanford University found that youths who experienced especially long periods of unemployment were particularly prone to negative long-term effects on future wages and employment.

Statistics:

  • The teen unemployment rate is 24 percent, a nearly 12 percent increase from earlier this summer.
  • African American teen unemployment is at 37.9 percent.
  • The national unemployment rate is at 10 percent.
  • The federal minimum wage is set to increase again on July 24th.
  • Research from the University of California-Irvine found that the unemployment rate would have been more than 3 percentage points lower than it is now if Oregon and Washington's minimum wage rates had been equal to the federal wage level between 2003 and 2008.

Sources:

  • Employment Policies Institute
  • Science Letter
  • NewsRx.com
  • University of California-Irvine
  • University of Georgia
  • Stanford University
  • University of North Carolina, Chapel Hill

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