The unemployment rate is 9.5%’ including discouraged folks who have stopped looking for work, and it’s approaching 20%; for teenagers, it’s almost 25%, for black teens, it’s almost 40%
The unemployment rate in June for American teenagers was 24%, for black teens it was 38%
With that as backdrop, Congress has scheduled an increase in the minimum wage later this month, taking the minimum wage up over 10% – from $6.55 to $7.25 an hour. The predictable impact: employers are certain to cut back at the low-end – laying off existing workers and not hiring new ones. It’s simple economics.
“Studies that focus on the least-skilled groups [i.e., teens, and welfare moms] provide relatively overwhelming evidence of stronger disemployment effects.”
Proponents argue that millions of workers will benefit from the bigger paychecks, but those who lose their jobs or who never get a job in the first place get a minimum wage of $0.
Economists estimate that the 70-cent per-hour minimum wage hike this month will kill about 300,000 jobs for those between the ages of 16-24.
“But the union economic model that now dominates Washington holds that wages only matter for those who already have jobs. The jobs that are (lost or) never created don’t count.”
Source articles:
http://online.wsj.com/article/SB124657739768489217.html
http://online.wsj.com/article/SB124743988386729701.html#mod=djemEditorialPage
* * * * *
I ask again, has anybody in Washington taken Econ 101 ?
* * * * *
The Homa Files 