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Does minimum wage hurt young people’s chances of finding jobs?

Updated: 2011-03-03T19:24:17Z

Do minimum wage hikes hurt young workers?
From 2007 to 2009, the federal minimum wage stair-stepped from $5.15 an hour to $5.85, then to $6.55 and finally to $7.25.

Yes •A wage hike is “an unemployment crisis” for young workers, says the Employment Policies Institute, because employers cut jobs to afford the increase. The ones cut are the youngest, least-skilled workers, the very ones the wage increases were designed to help.

•From July 2007 to July 2009 — the span in which the wage hikes occurred — the unemployment rate for teens and young adults soared. One in four teens who wanted to work couldn’t get hired.

No •Joblessness soared for all ages because of the recession, the Economic Policy Institute counters.

•Unemployment for 55- to 64-year-olds, for example, more than doubled in this recession, while unemployment for teens and young adults grew by just about two-thirds.

Unemployment rates after minimum wage increases
The recession caused unemployment to skyrocket across all age groups. Here’s how jobless rates for young workers — always higher than other age groups — compared with an established-career sector.

Age group16-1920-2425-2955-64
July 2007: Minimum wage rises to $5.85 from $5.15, where it had been since 199715.3%8.3%5.0%3.2%
December 2007: Recession begins, half a year after first wage increase.
July 2008: Minimum wage rises to $6.5520.810.26.43.8
December 2008: One year into recession, half a year after second wage increase.20.812.46.54.9
July 2009: Minimum wage rises to $7.2524.515.310.67.2
December 2009: Two years after recession began, half a year after third wage increase.27.115.610.37.0
July 2010: Latest breakdown available26.115.610.67.3

| Diane Stafford Source: U.S. Bureau of Labor Statistics

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