Feds: Minimum Wage Partially to Blame for Dismal Youth Employment

By Published on May 10, 2016

The Congressional Budget Office published a report Monday that concludes the minimum wage might be partially to blame for one in six young men being unemployed.

The report looked at the employment status of men between the ages of 18 and 34. It listed education, mass incarceration and laws that disproportionately impact minorities as some of the reasons 5 million young men are jobless. It also cited increases of the minimum wage over the year for potentially contributing to the problem.

“Higher minimum wages may also have increased joblessness among young men,” the report stated. “The federal minimum wage, adjusted for inflation, has not consistently risen since 1980, but there has been an increase in the number of state and local minimum-wage laws in recent years.”

Those in support of raising the minimum wage say the policy could help address poverty while critics warn it could put undue financial stress on businesses. Businesses could be forced to increase prices or even cutback on their workforce to overcome the added cost of labor. While income increases for some, others might lose their jobs and struggle to find another one.

Some economists had previously warned the policy was troublesome for those new to the workforce. The National Bureau of Economic Research and The Heritage Foundation determined the impact is especially bad for young and low-skilled workers. Nevertheless the University of California, Berkeley found that having less people in poverty outweighs the potential job loss.

The $15 minimum wage has grown in popularity in recent years as a way to fix income inequality. The Fight for $15 movement has been at the forefront of the policy push since it started in 2012. While the policy will do nothing to help unemployed poor people it might also hurt those with employment. The current federal minimum wage is at $7.25 an hour.

New York and California for instance both became the first state April 4 to raise its minimum wages to $15 an hour but they too have high unemployment rates among impoverished people. The Employment Policies Institute found in its report April 28 the policy doesn’t even help the majority of poor people. It found that in 41 states the majority of resident living in poverty and not employed.

 

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