New Report: Teen Unemployment and the Minimum Wage
Increased labor costs result in fewer on-the-job training opportunities for Louisiana teens
As the Great Recession drags on, unemployment remains a major concern throughout the state of Louisiana and the nation as a whole. While the jobs situation in Louisiana is somewhat better than the national average, the unemployment rate for working-age teens (16-19) is astronomical and bodes ill for the future of Louisiana’s youth.
Figures provided by the U.S. Census Bureau reveal shocking changes for the worse in regards to teenage employment in Louisiana:
- Between 2006 and 2011, the teenage unemployment rate in Louisiana more than doubled from 13.2% to 26.5%
- Louisiana teens with less than a high school education have seen their unemployment rate rocket from 13.6% in 2006 to 34.4% in 2011. This is an increase of 153%.
- The average hours worked per week for Louisiana teens fell from 9.7 to 5.7 hours – a decrease of 41.2%
The percentage of Louisiana teenagers who have a job declined from 35.4% in 2006 to 22.8% in 2011. That is a decline of 35.6%.
A new analysis finds that recent increases in the federal minimum wage have accelerated this trend. According to this analysis, increases in the minimum wage from $5.15 to $7.25 have cost Louisiana teenagers over 6,600 jobs.
It is not surprising that a 41 percent increase in the cost of unskilled labor would result in an excess supply of that labor. Policymakers should keep these basic economic facts in mind when contemplating minimum wage increases.