July 24, 2010

In its infinite wisdom - the Government...

Today is the first anniversary of a significant piece of Congressional action. From the Wall Street Journal:
The Young and Jobless
Today marks the first anniversary of Congress's decision to raise the federal minimum wage by 41% to $7.25 an hour. But hold the confetti. According to a new study, more than 100,000 fewer teens are employed today due to the wage hikes.

Economic slowdowns are tough on many job-seekers, but they're especially hard on the young and inexperienced, whose job prospects have suffered tremendously from Washington's ill-advised attempts to put a floor under wages. In a new paper published by the Employment Policies Institute, labor economists William Even of Miami University in Ohio and David Macpherson of Trinity University in Texas find a significant drop in teen employment as a direct result of the minimum wage hikes.

The wage hikes were implemented in three stages between 2007 and 2009, and not all states were affected because some already mandated a minimum wage above the federal requirement. But for the 19 states affected by all three stages of the federal wage increase, "there was a 6.9% decline in employment for teens aged 16 to 19," write the authors. And for those who had not completed high school, "we estimated that the hikes reduced employment by 12.4%," which translates to about 98,000 fewer teens in the work force.
Hat tip to Newsalert for the link. I wrote about this two weeks ago:
And to make matters worse, there are all of the feel-good programs for employees but nothing for the employer. There are a bunch of drop-dead bored teenagers in our town who are getting into trouble. I would love to hire them at the store but I cannot afford the $7.50 minimum wage for the work that they would do (cleaning and stocking). We have hired one of them (an employees daughter) at $8/hour but our payroll is already too high for our kind of business.
This person comes in for a few shifts each week to help stock the shelves. I would love to hire more local teens but for a retail store of this type, my payroll is about 15% higher compared to gross than it should be. The upside is that we are still making money and we are a solid employer in an area with at least 20% unemployment -- more if you count the teenagers who would love a job... Posted by DaveH at July 24, 2010 9:45 PM | TrackBack
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