One of the most amazing things about political commentary these days is the failure to connect cause and effect on the left. Some of those complaining the most vociferously about inequality are the very ones most strenuously advocating policies that would cut off job opportunities and educational opportunities for America’s most vulnerable populations.
The New York Times, for example, considers inequality of income and wealth one of the great problems of our age. But last Saturday the editorial page railed against a New York state proposal that would have allowed some of New York’s poorest children to escape poorly performing public schools and attend private ones instead. That followed on the heels of another Times editorial praising Los Angeles for imposing a $15 an hour minimum wage – a measure that will affect more than half of the city’s workers. That’s really bad news for anyone who can’t produce $15 worth of goods and services in an hour.
But first things first.
A Brookings Institution study of employment among teenagers and young adults begins with this dramatic statement:
The first decade of the 21st century, including the Great Recession and its aftermath, was disastrous for many American workers… For the first time following World War II, the U.S. economy did not have more payroll jobs at the end of a decade than at the beginning. Teens aged 16-19 and young adults aged 20-24 have been among the most adversely affected by the constricting labor market.
The study finds that employment rates among teens (age 16 to 19) declined dramatically, from 44 percent in 2000 to 24 percent in 2011. (See the graph below.) The effects were worse the lower the household income and the lower the educational attainment. The rates also differ by race and ethnicity:
- The unemployment rate among all teens in the nation’s 100 largest metropolitan areas nearly doubled, from 13 to 25 percent, and the underutilization rate rose from 25 to 43 percent.
- The underutilized labor force consists of the unemployed, the hidden unemployed (those who desire employment but are not actively looking) and the underemployed (those who are working part-time but desire and are available for fulltime work).
- In 2011, blacks teens had the highest rate of underutilization (60 percent), followed by Hispanics (52 percent), Asians (48 percent), and whites (35 percent)
- Only about half of high school graduates not enrolled in post-secondary education and less than 30 percent of high school dropouts worked in any given month in 2011
- The underutilized labor force in the nation’s top 100 metropolitan areas in 2011 included 1.8 million teenagers.
Why is this important? The Brookings scholars write:
Finding and keeping a job is a key step in a young person’s transition to adulthood and economic self-sufficiency. Employment obviously allows young people to cover expenses for themselves and their families, but it also provides valuable opportunities for teens and young adults to apply academic skills and learn occupation-specific and broader employment skills such as teamwork, time management, and problem-solving. Additionally, it provides work experience and contacts to help in future job searches.
I would say that the money wage is the least important benefit of working for young people. The other benefits are so enormous – especially for teenagers who don’t learn important skills at home or in school – that it really doesn’t matter what the first job pays.
Share of teens aged 16-19 in the nation’s 100 largest metropolitan areas with paid employment experience during the year, by race and ethnicity, 2000 and 2011.
Previously I criticized Paul Krugman and the editors of the Times for medieval thinking – denying the science of economics and suggesting there is such a thing as a free lunch. (On economic issues there is rarely any difference between Krugman and the unsigned editorials – either he ghost writes them or they are written by a Krugman clone.) But in the latest rendition, the Times admits that a minimum wage is like robbing Peter to pay Paul.
Yet the editorial virtually admits they have no idea who Peter is. If the minimum wage leads to higher consumer prices, Peter is the consumer. If it eats into profits, Peter is the shareholder. And although the Times doesn’t mention further options, if the minimum wage leads to fewer non-wage benefits, including less training, and if the higher prices are disproportionally paid by Peter and his family, Peter may actually be Paul!
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