New employment data released Thursday, July 2 confirmed what economists (and parents of teenagers across the country) feared – the bad economy and increasing federal minimum wage have had a disastrous effect on teens looking for jobs this summer.
Tennessee ranks second in the country in teen unemployment. The state’s teen unemployment rate was 36.3 percent in May 2009, according to new Bureau of Labor Statistics data. Tennessee’s overall unemployment rate was 10.7 percent. By comparison, the state’s overall unemployment rate was 6.2 percent in May 2008. Unemployment in Tennessee increased by 72 percent in just one year.
The latest employment data continues to show an increase in unemployment for America’s teens, which reached the highest rate in 17 years this spring and continued to climb over the summer. The teen unemployment rate is currently at 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.
Summer months have historically been a time when teenagers flock to entry-level employment opportunities, and in doing so, gain valuable job skills that increase their chance of successfully entering the adult workforce.
“The unintended consequence of the federal minimum wage hike is pricing some employees out of the workforce, and based on the recent unemployment data, it’s teens – minority teens especially – who are getting hit the hardest,” said Kristen Lopez Eastlick, Senior Research Analyst for the Employment Policies Institute. “A job for a young employee is a chance to gain important skills and learn the invisible curriculum that comes from being employed. Unfortunately many teens were denied the chance to learn skills that come with having a first job this summer because of an auto pilot wage increase coming on top of shrinking business profits.”
“The weak economy combined with high mandated wage levels created a perfect storm of unemployment for less experienced groups like teenagers this summer,” Eastlick continues. “Teens were pushed out of the job market by higher skilled applicants, including more experienced workers laid off due to economic woes.”
For vulnerable teens, a lack of entry-level job experience can have a long-term impact. 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. Research from the University of North Carolina, Chapel Hill, found that unemployment for teens continues to adversely affect earnings for as long as 10 years.
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