According to yesterday’s job report, the overall unemployment rate in August rose to 9.7 percent, its highest level in 26 years. The teenage unemployment rate, moreover, rose to 25.5 percent, its highest level since the government began keeping track in 1948. In addition, the percentage of teenagers in the workforce is at its lowest level in recorded history. The unemployment disparity is not a new phenomenon, it has been the norm. The chart below shows this:
Teenagers have two major handicaps in the job market: relatively less experience and education. This often makes them the least desirable employees. Considering these handicaps, teenagers do hold one bargaining chip: the ability to voluntarily work low wages. While not desirable, a teenager can begin a job at a low wage, gain experience, and gradually work his or her way up. This one bargaining chip, however, has been stolen by well-intentioned bureaucrats. Milton Friedman explains,
The do-gooders believe that by passing a law saying that nobody shall get less than $2 an hour or $2.50 an hour, or whatever the minimum wage is, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure that people whose skills are not sufficient to justify that kind of a wage will be unemployed. It is no accident that the teenage unemployment rate — the unemployment rate among teenagers in this country — is over twice as high as the overall unemployment rate. It’s no accident that that was not always the case until the 1950’s when the minimum wage rate was raised very drastically, very quickly. Teenage unemployment was higher than ordinary unemployment because, of course, teenagers are the ones who are just coming into the labor market — they’re searching and finding jobs, and it’s understandable that on the average they would be unemployed more. But it was nothing like the extraordinary level it has now reached — it’s close to 20%.