It has been well-documented that the recent recession has been especially hard on men, to the point that it’s frequently been referred to as a “man-cession.” But there’s another group that’s been hit equally hard by the recession, but without as much attention—teenagers. Although the national jobless rate of 9.8 percent in September is still a full percentage point below the 10.8 percent set in 1982, the teenage jobless rate soared to a record-setting 25.5 percent in August, and then raised again in September to yet another post-war high of 25.9 percent. The current teenage jobless rate is now almost two full percentage points above the previous record of 24.1 percent in December 1982 (see chart above), and will probably continue to climb even higher in the coming months.
Who or what can teenagers blame for the worst job market in history for their age group? They can certainly blame the recession, one of the worst since the early 1980s. But they also might want to blame Congress for raising the federal minimum wage from $5.15 per hour in 2006 to $7.25 per hour by July 2009, a 41 percent increase over the last three years and the largest inflation-adjusted minimum wage increase over a three-year period in more than 50 years.
Unfortunately, Congress priced teenagers right out of the labor market by hiking the minimum wage more than $2 per hour at the same time the pool of unemployed, skilled workers was increasing from the recession. The 41 percent increase in the minimum wage, along with increased competition from more skilled workers for the jobs teenagers typically fill, worked together to send teenage unemployment soaring to record levels.
The chart above of the teenage jobless rate and minimum wage over the last four recessions helps to illustrate how the 2008–2009 recession by itself would have been bad enough for teenage employment, but coupled together with the 41 percent minimum wage increase it created the worst teenage job market in history.
Teenage unemployment rates have always risen during recessions, and there were several minimum wage increases that happened around the time of recessions, which likely pushed the teenage jobless rate up even higher. There was an 8.1 percent increase in the minimum wage close to the 1981–1982 recession, and a 27 percent increase around the time of the 1990–1991 recession. But those increases were nothing compared to the 41 percent increase that took place in three steps starting in 2007 just preceding the recession, followed by increases in 2008 and 2009 in the midst of the recession. The chart clearly illustrates the fact that the minimum wage increased by 41 percent at the same time that the teenage jobless rate spiked to record highs, and it’s likely that the positive relationship is no coincidence.
Raising the minimum wage in the United States by 41 percent during the last three years has denied job opportunities and training to some of those who need those experiences the most—unskilled teenage workers.