Should the Minimum Wage Be Reduced for Teenagers?

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Not long ago, about half of teenagers could expect to earn money and learn some valuable lessons about the real world through a summer job. This summer, however, three out of every four teens will be out of work. If the minimum wage drops back to the mid-2000s level of $5.15 only for kids ages 16 to 19, as many as 500,000 jobs could be created—which would obviously help teens, but also it’d help the parents and towns that are surely going to struggle to keep bored unemployed teenagers from doing the things they shouldn’t be doing this summer.

The idea of making the minimum wage more minimal for teens is suggested in USA Today:

It’s a good time to try a budget-neutral idea: Set a separate, lower minimum wage for those ages 16-19. James Sherk, a labor policy analyst at the conservative Heritage Foundation, estimated that a shift back to $5.15 an hour for teens could create nearly 500,000 such jobs — at zero cost to taxpayers.

It’s notable that the federal minimum wage has seen a swift and steep increase in the past few years. Since 2007, it has jumped 41%, growing to the current $7.25 an hour from $5.15. In that same time, the May teen unemployment rate has skyrocketed to 26% from 16%. A 10% increase in the minimum wage reduces teen employment by about 2%, Sherk figures. And while the recession clearly played a large role, the rapid minimum-wage hikes exacerbated the job losses. A March policy brief from Ball State University estimated that 310,000 teens were without part-time employment because of the increases. When the minimum wage rose, creation of part-time entry level jobs plummeted — disproportionately impacting teens.

A selective decrease of the minimum wage is extremely unlikely to occur. The main argument is that it amounts to age discrimination. Such a change would give teens an advantage over those 20 and up whom employers would have to pay at least $7.25 an hour. As USA Today says:

Labor unions and low-income advocacy groups — both of which vigorously supported the minimum-wage increases mandated in 2007 — are likely to be concerned that paying teens a lower wage will increase unemployment for older minimum-wage workers.

Of course, nobody wants that. But no one wants the vast majority of teenagers idling all summer and every summer for years to come, nor for the next generation of young people to have to try to enter the workforce in their 20s with no actual work experience.

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