Youth Unemployment: Minimum Wage Law Needs To Be Killed NOW
The state of unemployment in the US among young Americans is even worse now than in 2007. The Natonal Review blog, the Agenda, sums up some facts from The Progressive Policy Institute and the picture is really bad.
- The percentage of non-student Americans between the ages of 16-24 who are not working full-time is ten percent less this year than it was in 2007. Now, just over a third, 36 percent, have full time work.
- For those who did not get a high school diploma, only 14 percent have full time jobs.
- For non-students between the ages of 16-24, who did not have full-time jobs, only 5.6 out of 17 million have part time jobs.
- Almost half of those 17 million youths (8.4 million of them) are not even “in the labor force”—in other words they have given up looking for a job and are not even trying.
After showing some charts from the Bureau of Labor Statistics, Diana Carew writes for PPI,
“Together, these charts suggest the problem facing young Americans is structural. If worsening labor market conditions were a temporary effect of the recession, we would have expected to see improvement with the recovery. Instead, young Americans appear stuck in their post-recessionary state.”
I hate seeing this horrible economy even called a “recovery,” but Carew is right that we are seeing structural unemployment that is hitting the youth in a devastating way.
Yet the solution is not mentioned by her nor by the National Review post: Get rid of the minimum wage law. Kill it. Do it yesterday.
I know establishment economists sneer at this idea, because they have convinced themselves on the basis of their own exotic numbers that higher minimum wage laws don’t cause “that much” unemployment. But society naturally resists the damage done by government price controls as much as it can (in this case: controlling the price of labor) until the pressure becomes too great. The results of minimum wage law are not a flat ratio. The damage done to the economy is more like a stretched rubber band. It suddenly snaps.
It is obvious that this structural change requires a structural response. We need to destroy and denounce all minimum wage laws. Remember, the price of present youth unemployment is going to pursue them into adulthood. The National Review quotes The Economist:
“Take two men with the same education, literacy and numeracy scores, places of residence, parents’ education and IQ. If one of them spends a year unemployed before the age of 23, ten years later he can expect to earn 23% less than the other. For women the gap is 16%. The penalty persists, though it shrinks; at 42 it is 12% for women and 15% for men.”
Youth unemployment is a killer. It sends reverberations of impoverishment far into the future. Furthermore, if we allowed wages to fall, prices would inevitably fall as well. We might finally get the reset and full recovery for this economy that we need.