The Minimum Wage and Youth Unemployment

The minimum wage is a hot topic across our nation in the US. Many left-leaning Americans want to push the minimum wage ever higher, to combat cost of living increases and inflation. Right-leaning Americans often decry the minimum wage, but their reasoning often just boils down to ‘communism’. However, it’s absolutely true that the minimum wage has an impact on our unemployment rates in the US, particularly when it comes to teenagers.

In this post, that’s exactly what I want to discuss; how the minimum wage rates in America are affecting the employment rates, prospects, and futures of our teens today (and adults tomorrow). I also want to show how other nations have approached the problem.

But first, we have to start almost 100 years back in history. Let’s read about unemployment from a Federal paper written in the early 1950s.

To summarize, employment rates for black and white men across the age spectrum were virtually the same, with the two extreme ends diverging with slightly more black boys and elders working than whites. This was true throughout the 1940s into the mid-1950s. Just after the author wrote this paper, the unemployment rates began to diverge, moreso for black teens than black adults. This trend continued unnoticed until the late 70s. In the early 80s, the Federal government tasked economists with looking at the unemployment rates among minority teens. Here’s an excerpt from one of these papers.

Around the same time, Walter Williams, a noted economist, made a short documentary detailing his research into the phenomenon. Here’s a brief screenshot detailing the minimum wage as compred to the unemployment rate of black male teens age 16-17.

His documentary is called Good Intentions and you can watch the video on Youtube. I highly recommend it.

Today, black male teenager unemployment in the US is consistently twice as high as white male teenager unemployment and has been since the mid-80s. In some urban areas, youth unemployment is almost 90%, such as Chicago. This can only increase crime as crime has no minimum wage and teens still want money to spend.

The UK (hardly a society of free market ideals) sees this problem quite clearly. The minimum wage is tiered based on age. Here is an excerpt from a UK government blog detailing why they implement separate minimum wages for teens.

The main reason for setting a lower wage floor for younger workers is to protect employment. The LPC’s remit for young workers is to push pay as high as possible without harming their employment prospects. Evidence shows that younger workers are at higher risk of being priced out of jobs than older workers. They are also more likely to experience a ‘scarring effect’ if they spend time out of work, with lower wages that can last several decades. Above all else, we want to ensure that the youth rates are set at a level that means young people are not excluded from the labour market.

Take this into account with the fact that youth employment rates in the UK across both males and females are consistently higher overall than in the US. Damn British Socialists.

In the end, unemployed teenagers become under-employed adults. Not only this, but several youth outreach programs in urban cities recognize that the best way to stop a bullet is with a job. We should build this narrative into our minimum wage discussions as we legislate policy changes here in the United states.

Like and Subscribe for more content like this in the future.