Tag Archives: Youth

News

Real unemployment rate for youth is 22.9%

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I found an article  from the Wall Street Journal via Lonely Conservative in Captain Capitalism’s latest round-up .

Excerpt:

When the recession began in December, 2007, 59.2% of the under-25 population was in the labor force, meaning they were either working or looking for work. Today, that figure has fallen to 54.5%. That may not sound like a big drop, but it makes a huge difference. If the so-called participation rate had remained unchanged, there would be 1.8 million more young people in the labor force today than there actually are. Counting those people as unemployed, rather than out of the labor force, would push the unemployment rate up to 22.9%. That’s only a hair better than the 23.9% youth unemployment rate in the euro zone, and has shown only very modest improvement during the recovery.

The decline in the participation rate among the young can’t all be attributed to the recession. Labor force participation among young people peaked at just under 70% in 1989, and has trended downward ever since, primarily due to rising rates of college attendance.

The decline accelerated during the recession, as many young people sought refuge in college or other forms of education or training. In a normal cycle, that might have worked out well, leaving a generation of highly educated workers ready to re-enter the job market when the economy recovered. Instead, they have been graduating into a labor market that remains deeply challenged, especially for those without much work experience. To make matters worse, many graduates are carrying hefty debt burdens, and those who can find work are often being forced to low-skill jobs.

But are these young people victims? Or are they doing this to themselves?

Young UK socialists rejoice over Maggie Thatcher's death
Young UK socialists rejoice over Maggie Thatcher’s death

I was looking over the Captain’s blog and I found a post where he argues that young people are not victims.

He writes:

However, before we all jump on the baby boomer generation (and don’t worry, history will be INCREDIBLY harsh on them) we have to look at our own generational selves in the mirror.  Specifically, whether we deserve all these programs or not.

Of course, the question is moot and academic.  I don’t think there will be any money to be paid out in the first place, but let’s just say there was.  Do our generations really deserve all the unicorns, puppies, hope, and change the government says we’re entitled to?  I say no and here is the reason why.

Gen X and Gen Y are doing the EXACT same thing as their baby boomer predecessors did.  They are spending more money than they make.  They expect other people to take care of themselves.  They are entitled WAY more than the baby boomers ever were.  And (most importantly) THEY VOTED IN DROVES FOR BARACK OBAMA and thus THE MORTGAGING OF THEIR OWN FUTURES.

Much as I loathe the baby boomers, the successive generations, mine included, are worse.  Despite BLATANT and OBVIOUS financial problems our generations faced, we lacked the adult maturity (let alone simple 2nd grade mathematics) to turn this country around.  And while the baby boomers have been voting more and more conservative, it is the younger generations through galactic stupidity, ignorance and selfishness that merely nailed a couple more nails in the US-coffin and thus our own futures.

Like I said, I doubt there will even be any money for Gen Y, Gen X and any future generations to make good on all those socialist entitlement goodies we promised ourselves.  But before we start blaming previous generation’s for our current problems, we should start blaming ourselves for making our future problems worse.

We should be careful about pitying young people who are struggling to find work, and who won’t get a dime from social programs like Social Security and Medicare. They are voting to punish employers with taxes and regulations. Most of them don’t know or care about what they are doing – they don’t connect their vote to their unemployed status. They think that education means jobs, and that they can vote in order to feel good and be liked, and still find work. They think that if they pay into these entitlement programs, then the money will be there. They trust Obama and they vote for him. They are not victims.

News

First black president: unemployment rate up for blacks and women since Obama’s election

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From CNS News.

Excerpt:

 Unemployment for both women and African-Americans is higher today than it was when President Barack Obama first took office in 2009, according to federal government data.

Despite an economy that has technically been in recovery since June of 2009, many economic indicators are the same or worse than when President Obama gave his first address to a Joint Session of Congress in February 2009.

“We will rebuild, we will recover, and the United States of America will emerge stronger than before,” Obama said in that speech.

However, employment for African-Americans and women has not recovered and, in fact, is worse today than it was when Obama said those words.

At the end of January 2009, 12.7 percent of African-Americans were unemployed. Four years later, January 2013, the situation was worse, with unemployment higher at 13.8 percent.

Further, an additional 1.2 million African-Americans had left the workforce entirely during the same time period, with the number of those reported as not in the workforce rising from 10.3 million in January 2009 to 11.5 million in January 2013.

People not in the labor force are those who are younger than the retirement age who are unemployed and no longer looking for work, indicating they have either given up looking for work or gone into early retirement.

For women, the story is not much better. In January 2009, 6.9 percent of women in America were unemployed. By January 2013, 7.8 percent of women were unemployed.

He’s had four years, and his new plan to raise the minimum wage is not going to help younger workers, unskilled workers or minority workers.

Polemics

Obama’s minimum wage hike will raise unemployment, especially for younger workers

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Obama is proposing a hike to the minimum wage rate, so that employers are forced to pay the youngest and/or least skilled workers more money than they are worth. Will this lower unemployment?

When considering what economic policies to adopt, it is not enough to do what feels good. Liberals and conservatives agree that it is good to help the poor. Liberals think that higher minimum wage rates help the poor, and conservatives think that lower minimum wage rates help the poor. This is not a topic that is up for debate, though, because economists across the left-right spectrum agree on this one.

Take a look at this post from Harvard University economist Greg Mankiw.

He writes:

My favorite textbook covers business cycle theory toward the end of the book (the last four chapters) precisely because that theory is controversial. I believe it is better to introduce students to economics with topics about which there is more of a professional consensus. In chapter two of the book, I include a table of propositions to which most economists subscribe, based on various polls of the profession. Here is the list, together with the percentage of economists who agree:

    1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
    2. Tariffs and import quotas usually reduce general economic welfare. (93%)
    3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
    4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
    5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
    6. The United States should eliminate agricultural subsidies. (85%)
    7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
    8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
    9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
    10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
    11. A large federal budget deficit has an adverse effect on the economy. (83%)
    12. A minimum wage increases unemployment among young and unskilled workers. (79%)
    13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
    14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

And that’s not all. There have actually been studies done on this, and they echo the consensus.

Consider this 2009 article from the Wall Street Journal that discusses some of the studies.

Excerpt:

Earlier this year, economist David Neumark of the University of California, Irvine, wrote on these pages that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs. Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers.

he September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July.

[…]Two years ago Mr. Neumark and William Wascher, a Federal Reserve economist, reviewed more than 100 academic studies on the impact of the minimum wage. They found “overwhelming” evidence that the least skilled and the young suffer a loss of employment when the minimum wage is increased.

[…]State lawmakers are also at fault. At least 10 states have raised their minimum wages above the federal level in the last decade, largely in response to union lobbying and in the name of helping the working poor. Four states with among the highest wage rates are California, Massachusetts, Michigan and New York. Studies have shown in each case that their wage policies killed jobs for teens. The Massachusetts teen employment rate sank by one-third when the minimum wage rose by 88% between 1995 and 2008.

According to new numbers from the Labor Department, in 2008 only 1.1% of Americans who work 40 hours a week or more even earned the minimum wage. In other words, 98.9% of 40-hour-a-week workers earn more than the minimum. The data also show that teenagers are five times more likely to earn the minimum wage than adults. Minimum wage jobs are nearly all first-time or part-time jobs, and an estimated two of every three minimum wage workers get a pay raise within a year on the job.

You can read more about minimim wage and unemployment from my second favorite economist Walter Williams, and from my first favorite economist Thomas Sowell. This is an issue that matters to them, because they are both black, and blacks are the hardest hit by these policies – even though most blacks support these policies by voting overwhelmingly for socialists.

This issue is simple and straightforward. To help the poorest and least experienced workers, we have to take away any regulations that separate them from their first employer. From there, they will gain the experience to move up. Nobody stays in a minimum wage job all their lives. They move up when they get experience and a resume. That’s why that first job is so crucial. We have to make it easier for employers to get employees started in their careers.