Economic woes ripple into student lives
Some had internships, some sought adventure abroad, some bummed around the house, some spent the summer looking for a job, and a few found employment. After sitting in classrooms for a good nine months, the majority of American youth need a new scene. Summer is a time for - as John Cleese would say - "something completely different." Having torn free from the bonds of professorial dictates and stifling schedules, the ability to choose one's activities for the following three months is a luxury of epic proportion. And some do have great opportunities: wealthy parents or a generous relative may finance a trip to Europe. Numerous applications painstakingly written months in advance may have provided one with the opportunity to work as an intern or lab assistant. Others may return to their hometown community swimming pool to reclaim their lifetime gig as the beloved lifeguard. Yet for each trip to Europe or invaluable experience at a top organization there are many wholly unable to set their own summertime agenda. The economic woes of the past year served only to intensify this unfortunate reality. The precise definition of an economic recession is two consecutive quarters of negative growth. Although the country did not fall victim to even one quarter of such anemic figures, Americans did feel the pressure of a slowing economy, as (among other things) the housing bubble burst, the dollar weakened and gas prices soared. In the midst of the economic malaise, students throughout the country finished school and ventured out in search of a job - for a bit of spending money, resume enhancement and good old-fashioned character building.
Despite the moxie exhibited by a great many teens on the path to gainful employment, the statistics were not in their favor. At the beginning of the summer Kristen Lopez Eastlick, in an article published by the Washington Examiner, provided the distressing news: "According to [the Department of Labor's] data, only about one-third of Americans 16 to 19 years old will have a job this summer, and vulnerable low-income and minority teens are going to fare even worse. The percentage of teens classified as 'unemployed' - those who are actively seeking a job but can't get one - is more than three times higher than the national unemployment rate, according to the most recent Department of Labor statistics."
At the heart of this mass increase in teenage unemployment was the July 24 increase in the federal minimum wage, mandated by the Fair Pay Act of 2007 - one of Nancy Pelosi's early boondoggles as House Majority leader. Indeed, far from proving to be an economic boon, the increase in the minimum wage contributed to a teen unemployment rate of 20.3 percent, the highest such rate in over 10 years. This is a number made even more dramatic when compared with the percentage of total unemployment, 5.7 percent (a figure many consider to be full employment).
On its face, the minimum wage sounds like a benevolent policy, proffering nothing but excellent results - a course of action sure to shower all who promote it with good karma for years to come. Though appearing to be benign, this summer's unemployed teens can attest that this is naught but an illusion. The minimum wage artificially raises the cost of unskilled labor, which, as any first-year economics major can confirm, results in a decrease in the demand for such labor. In this way the government's actions encourage employers to seek alternatives like machines or new production methods rather than hire employees to provide labor not worth the price mandated by the government. It is an empirical fact that as the minimum wage rises so, too, does the unemployment rate.
In addition to the negatives resulting from this form of price control, it is important to note the demographic makeup of minimum wage earners. The U.S. Census reveals that the majority of minimum wage recipients are teens and young adults just starting off in the job market. Only seven percent were heads of households, and as a study by the Employment Policies Institute revealed, two-thirds of minimum wage workers move above the minimum wage in one year or less. Although a seemingly virtuous endeavor, raising the minimum wage in the majority of cases results not from constituent service but rather legislative pandering to special interest groups, namely labor unions. Supporters of a higher minimum wage might fool themselves into believing their own assertions of moral superiority, but the results of their actions speak louder than their intentions.
Caroline May is a Will Rice College senior.
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