Geral
Editorial do WSJ
Perhaps you've already noticed around the neighborhood, but this is a rotten summer for young Americans to find a job. The Department of Labor reported last week that a smaller share of 16-19 year-olds are working than at anytime since records began to be kept in 1948.
Only 24% of teens, one in four, have jobs, compared to 42% as recently as the summer of 2001. The nearby chart chronicles the teen employment percentage over time, including the notable plunge in the last decade. So instead of learning valuable job skills—getting out of bed before noon, showing up on time, being courteous to customers, operating a cash register or fork lift—millions of kids will spend the summer playing computer games or hanging out.
The lousy economic recovery explains much of this decline in teens working, and some is due to increases in teen summer school enrollment. Some is also cultural: Many parents don't put the same demands on teens as they once did to get out and work.
But Congress has also contributed by passing one of the most ill-timed minimum wage increases in history. One of the first acts of the gone-but-not-forgotten Nancy Pelosi ascendancy was to raise the minimum wage in stages to $7.25 an hour in 2009 from $5.15 in 2007. Even liberals ought to understand that raising the cost of hiring the young and unskilled while employers are slashing payrolls is loopy economics.
Or maybe not. The Center for American Progress, often called the think tank for the Obama White House, recently recommended another increase to $8.25 an hour. Though the U.S. unemployment rate is 9.1%, the thinkers assert that a rising wage would "stimulate economic growth to the tune of 50,000 new jobs." So if the government orders employers to pay more to hire workers when they're already not hiring, they'll somehow hire more workers. By this logic, if we raised the minimum wage to $25 an hour we'd have full employment.
Back on planet Earth, the minimum wage increase has coincided with the plunge in the percentage of working teens. Before the most recent wage hikes, roughly seven million teens were working. Now there are closer to five million with a job and paycheck.
Black teens have had the worst of it, with their unemployment rate rising to 41.6% in April from 29% in 2007, faster than almost any other group. A 2010 study by economists William Even of Miami University of Ohio and David Macpherson of Trinity University found that as a result of the $2.10 increase in minimum wage, "teen employment dropped by 6.9 percent. . . . For the teen population with less than 12 years of education completed, teen employment dropped by 12.4 percent." For teens priced out of the labor market, their wage fell to zero.
The great tragedy is that even discussing the role of the minimum wage in teen unemployment seems to be a political taboo. The other day we saw ABC's George Stephanopoulos baiting Michele Bachmann on the minimum wage, as if refusing to raise it would be some epic political gaffe. Ms. Bachmann didn't back down from saying that the minimum wage has contributed to unemployment, though she didn't explain why.
What she or another candidate should do is stop playing defense and ask why Mr. Stephanopoulos doesn't seem to mind a black teen jobless rate of 41.6%. Someone truly brave would come out for a teenage sub-minimum wage of, say, $4 an hour. In certain circumstances employers can now pay teens a minimum of $4.25, but only for 90 days. This makes employers reluctant to hire at all. Make the case on moral grounds that a mandated wage that is too high blocks the young and unskilled from grabbing a place on the economic ladder.
Teenagers who work part-time while attending school generally make more money and have more successful careers as adults than kids who never work. As a 2006 study by the Federal Reserve Bank of Chicago put it: "The drop in teen labor force participation may also have implications for future productivity growth. In general, labor market experience tends to raise subsequent earnings."
The U.S. has long had a labor market flexible enough that when the economy grows, the jobless rate falls smartly. This time has been different, and the great danger is that Obamanomics has moved the U.S. to a permanently higher jobless rate as in so much of Europe. For America's teenagers this summer, that reality is already here.
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Geral
The Jobless Summer
Editorial do WSJ
Perhaps you've already noticed around the neighborhood, but this is a rotten summer for young Americans to find a job. The Department of Labor reported last week that a smaller share of 16-19 year-olds are working than at anytime since records began to be kept in 1948.
Only 24% of teens, one in four, have jobs, compared to 42% as recently as the summer of 2001. The nearby chart chronicles the teen employment percentage over time, including the notable plunge in the last decade. So instead of learning valuable job skills—getting out of bed before noon, showing up on time, being courteous to customers, operating a cash register or fork lift—millions of kids will spend the summer playing computer games or hanging out.
The lousy economic recovery explains much of this decline in teens working, and some is due to increases in teen summer school enrollment. Some is also cultural: Many parents don't put the same demands on teens as they once did to get out and work.
But Congress has also contributed by passing one of the most ill-timed minimum wage increases in history. One of the first acts of the gone-but-not-forgotten Nancy Pelosi ascendancy was to raise the minimum wage in stages to $7.25 an hour in 2009 from $5.15 in 2007. Even liberals ought to understand that raising the cost of hiring the young and unskilled while employers are slashing payrolls is loopy economics.
Or maybe not. The Center for American Progress, often called the think tank for the Obama White House, recently recommended another increase to $8.25 an hour. Though the U.S. unemployment rate is 9.1%, the thinkers assert that a rising wage would "stimulate economic growth to the tune of 50,000 new jobs." So if the government orders employers to pay more to hire workers when they're already not hiring, they'll somehow hire more workers. By this logic, if we raised the minimum wage to $25 an hour we'd have full employment.
Back on planet Earth, the minimum wage increase has coincided with the plunge in the percentage of working teens. Before the most recent wage hikes, roughly seven million teens were working. Now there are closer to five million with a job and paycheck.
Black teens have had the worst of it, with their unemployment rate rising to 41.6% in April from 29% in 2007, faster than almost any other group. A 2010 study by economists William Even of Miami University of Ohio and David Macpherson of Trinity University found that as a result of the $2.10 increase in minimum wage, "teen employment dropped by 6.9 percent. . . . For the teen population with less than 12 years of education completed, teen employment dropped by 12.4 percent." For teens priced out of the labor market, their wage fell to zero.
The great tragedy is that even discussing the role of the minimum wage in teen unemployment seems to be a political taboo. The other day we saw ABC's George Stephanopoulos baiting Michele Bachmann on the minimum wage, as if refusing to raise it would be some epic political gaffe. Ms. Bachmann didn't back down from saying that the minimum wage has contributed to unemployment, though she didn't explain why.
What she or another candidate should do is stop playing defense and ask why Mr. Stephanopoulos doesn't seem to mind a black teen jobless rate of 41.6%. Someone truly brave would come out for a teenage sub-minimum wage of, say, $4 an hour. In certain circumstances employers can now pay teens a minimum of $4.25, but only for 90 days. This makes employers reluctant to hire at all. Make the case on moral grounds that a mandated wage that is too high blocks the young and unskilled from grabbing a place on the economic ladder.
Teenagers who work part-time while attending school generally make more money and have more successful careers as adults than kids who never work. As a 2006 study by the Federal Reserve Bank of Chicago put it: "The drop in teen labor force participation may also have implications for future productivity growth. In general, labor market experience tends to raise subsequent earnings."
The U.S. has long had a labor market flexible enough that when the economy grows, the jobless rate falls smartly. This time has been different, and the great danger is that Obamanomics has moved the U.S. to a permanently higher jobless rate as in so much of Europe. For America's teenagers this summer, that reality is already here.
- I Was Right About That Strange Jobs Report
By JACK WELCHImagine a country where challenging the ruling authorities—questioning, say, a piece of data released by central headquarters—would result in mobs of administration sympathizers claiming you should feel "embarrassed" and labeling...
- Why Women Make Less Than Men
By KAY HYMOWITZ, WSJ First, the Atlantic magazine announced "the end of men." Then a Time cover story in March proclaimed that women are becoming "the richer sex." Now a Pew Research Center report tells us that young women have become more likely than...
- The Buffett Ruse
Editorial do WSJ Obama's ploy means the highest capital gains tax rate since 1978 Remember the moment in 2008 when Charlie Gibson of ABC News asked Senator Barack Obama why he would support raising the capital gains tax even though "revenues from...
- Stimulus And The Depression: The Untold Story
By HAROLD L. COLE AND LEE E. OHANIAN, WSJ About one-half of President Obama's proposed $447 billion American Jobs Act consists of payroll tax holidays designed to boost spending and increase hiring. But these temporary policies will do little to...
- The Buffett Alternative Tax
Editorial do WSJ Washington has repeated nearly every economic policy mistake of the 1930s in recent years, so why not repeat one of the bigger blunders of the 1960s too? We refer to President Obama's proposal yesterday for a new "Buffett Rule" to...