The latest disaster caused by government’s invasion of the private sector is the worldwide unemployment rate of teens.
Global youth unemployment has hit a record high following the financial crisis and is likely to get worse later this year, the International Labor Organization (ILO) said Thursday.
The report from the ILO says 81 million out of 630 million 15-24 year olds where unemployed at the end of 2009, some 7.8 million more than at the end of 2007.
Thursday marks the first day of the UN International Youth Year; the ILO warned these trends will have “significant consequences for young people as upcoming cohorts of new entrants join the ranks of the already unemployed.”
The world risks a crisis legacy of a “lost generation” of young people who dropped out of the job market, the organization added in its report.
Sounds bad, right? But how bad is it just in America, during the Obama Recovery Summer?
Unemployment has risen across all demographic groups in the recession, and especially for youth. In December 2007 the seasonally adjusted unemployment rate for workers between the ages of 16 and 24 stood at 11.8 percent. By April 2010 it had risen 7.8 percentage points to 19.6 percent: roughly 60 percent greater than the increase in overall unemployment. The figures are worse for teenagers: 25.4 percent of teenagers who want jobs cannot find them.
So what can be done to fix the problem?
For starters, get rid of the federal and state minimum wages. They are killing the teenage job sector:
The federal mandated minimum wage prevents young people from obtaining an entry-level position and gaining valuable skills. As economics 101 explains, businesses have a disincentive to hire inexperienced young workers if they are forced to pay them at least $7.25 an hour. As a result, a willing potential young worker may stay inexperienced and unemployed due to the government’s intervention.
According to Joe Sabia, an Associate Professor in Public Policy at American University:
A 10% increase in minimum wage reduces retail employment by 1%, and reduces employment among young workers by 3.4%. Obama’s proposal would raise the federal minimum wage by over 30%, causing even greater job loss at a time when our economy can least afford it.
A Wall Street Journal article confirms these findings:
Two years ago Mr. Neumark and William Wascher, a Federal Reserve economist, reviewed more than 100 academic studies on the impact of the minimum wage. They found ‘overwhelming’ evidence that the least skilled and the young suffer a loss of employment when the minimum wage is increased.
So why exactly does a higher minimum wage impact the youth this way?
Orphe Divounguy with the Center for Freedom and Prosperity explains:
Quinn’s First Law is once again proven correct: Liberalism always generates the exact opposite of its stated intent. In this instance, the liberal’s intent was to raise the minimum wage for all workers. Instead, it lowered the wage for a large amount of youth workers to $0.00.
