Employment Policies Institute Says Skyrocketing Teen and Minority Teen Unemployment Should Caution Lawmakers Against Raising the Wage Floor
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August 6, 2004
WASHINGTON -- Lower than anticipated job growth in July should instill caution in Washington lawmakers, the California assembly, and Florida voters -- all of whom are considering increases in their respective minimum wages. Even worse than the lack of expected job growth are the rising rates of unemployment for our nation's teens, particularly young African-Americans. All of these developments are highlighted in the latest report on Gatewayjobs.com, a website focused on the current crisis in entry- level employment and which provides information on government assistance programs designed to promote employment and economic success.
While entry-level employees generally face significantly higher unemployment rates than all other employees, these rates have been increasing dramatically over the last several months. In July, the national unemployment rate dropped to 5.5%. In stark contrast, teenagers saw a 5% increase in their unemployment rate up to 17.6%. African-American teens experienced an increase in unemployment of over 13% and now face an unemployment rate of 37.0%. This was the fourth straight month unemployment increased for this group -- an alarming 31% increase over that period.
Despite the harsh employment outlook facing these groups, political leaders across the country continue to call for sizable minimum wage hikes. Economic research clearly shows that it will be these low-skill employees who will suffer the most employment loss from the proposed increases. Economists at Cornell University found that when you raise the minimum wage, vulnerable groups such as African-American young adults suffer four times more job loss than their non-black counterparts.
"Lawmakers in Washington, D.C. and California, along with voters in Florida, should pay close attention to these unemployment numbers," said Craig Garthwaite, the director of research for the Employment Policies Institute. "Decades of economic research show that when you raise the minimum wage, low- skill employees suffer disproportionate job loss. These latest unemployment figures are proof that these workers already face extreme difficulty getting hired. They should not face the added burden of an increase in the wage floor."
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding entry-level employment.