Democrats teen job killers

Michael Saltsman:

It's one of the fundamental laws of economics: When you increase the price of something you will ultimately decrease demand for that product. With the first anniversary of the recent 40 percent hike in the minimum wage upon us, we see that maxim in effect once again.

A new study by labor economists William Even (Miami University) and David Macpherson (Trinity University) shows that the federal wage hike implemented between July 2007 and July 2009 was responsible for 114,000 fewer employed teens. Businesses "bought" less labor.

In states that felt the impact of the full 40 percent wage increase, teen employment fell by 6.9 percent.

Texas was emblematic of this nationwide trend. The $2.10 wage increase was responsible for a 27,000-person decline in the number of employed 16- to 19-year-old Texans — a drop of 6.9 percent. The decline is even steeper for those teens with less than 12 years of education, who suffered a 14 percent drop in employment.

That's a conservative estimate, as it doesn't take into account employers making longer-term hiring adjustments. As time passes, it's likely that the total teen employment loss will be even higher.

Why are teens' job prospects so vulnerable to minimum wage increases? To put it bluntly, it's because they don't have many valuable workplace skills. For the most part, they occupy the first rung on the employment ladder, manning cash registers and cooking burgers.

But when the minimum wage is arbitrarily hiked by the federal government, businesses are faced with a dilemma. They can only justify paying the higher cost of labor for employees who have a larger set of skills. Instead of paying teens to do menial work, business owners will shed labor wherever they can find new ways to automate or integrate self service.

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Most of the automation from farms to manufacturing has been to reduce labor cost. Driving up the cost of labor beyond the value that business puts on it will only result in fewer employees. The minimum wage has been especially devastating to black teenagers who need jobs. While this report does not focus on that aspect others have indicate the black teen unemployment rate is higher than the average.  The Democrat gift to Big Labor has been devastating to a major constituency group.