Saturday, July 26, 2008

that pesky law of demand

I'm not sure this is cause-effect-- or at least the extent to which there is cause-effect-- but it should not be surprising to have higher-than-average teen unemployment when the government insists that the wages of unskilled labor would be artificially increased.

Of course, a relatively tough economy makes it tougher on all labor-- and on general-skill labor in particular. And one might try to quibble that the minimum didn't go up until July, but presumably, business owners are forward-looking enough to incorporate that into their summer-long plans, yes?

Anyway, increased joblessness for a population that needs job experience is just one more reason not to want a higher minimum wage...

Here's Bill Wolfe in the C-J on the effect, if not the cause...

Nineteen-year-old Raydell Williams says he's been out looking for a job almost every day for the past two months.

"McDonald's, Wal-Mart, Sears, Home Depot. … I have been to Wendy's, Arby's, some bowling alleys -- any time that I see them hiring or taking applications."

But so far, the Iroquois High School graduate, who lives at his parents' home west of Shively, remains jobless.

With unemployment rates on the rise in Kentucky, Indiana and nationwide, the summer-job market for teens this year is shaping up as one of the worst, said Joe McLaughlin, a research associate at the Center for Labor Market Studies at Northeastern University.

"We think that this summer, there will be a record, historic low employment rate" for teens ages 16-19, with about 34 percent working, he said. That would be about half a percentage point below last year, he said, and "the lowest on record, going all the way back to 1948."

Locally, "the overall job market is definitely tighter than it was a year ago," said Michael Gritton, executive director of KentuckianaWorks, the local agency that handles federal job-training aid. And that translates to a tight market for teens, who find themselves now competing with adults for jobs, Gritton said....

In 2000, the national teen employment rate was 45 percent, he said. Last year, the rate was 34.5 percent, a 10.5 percentage point decline.

Kentucky's teen employment rate in 2000 was 52.5 percent, but fell to 41.2 percent for the 2006-2007 average -- the 15th largest decline among the 50 states, McLaughlin said.

Indiana's teen employment rate dropped from 62.6 percent to 42.5 percent -- the nation's second-largest decline. Michigan saw the worst drop with a 19.8 percentage point decline....


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