Media Ignore Minimum Wage Hike's Impact on May Unemployment Rise

It certainly wasn't surprising how press outlets desperately trying to depict the economy as depression-like in order to get Barack Obama in the White House were practically giddy following the dour jobs report released by the Labor Department last Friday.

What was shocking given the portion of May's unemployment rate rise attributed to high school and college students looking for summer jobs was that virtually no press outlets considered the impact last year's minimum wage hike might have had on young Americans finding temporary positions between school years.

Consider this op-ed published in Monday's Washington Examiner authored by Kristen Lopez Eastlick, the senior economic analyst at the Employment Policies Institute (emphasis added throughout):

This year, it's harder than ever for teens to find a summer job. Researchers at Northeastern University described summer 2007 as "the worst in post-World War II history" for teen summer employment, and those same researchers say that 2008 is poised to be "even worse."

According to their data, only about one-third of Americans 16 to 19 years old will have a job this summer, and vulnerable low-income and minority teens are going to fare even worse.

The percentage of teens classified as "unemployed" - those who are actively seeking a job but can't get one - is more than three times higher than the national unemployment rate, according to the most recent Department of Labor statistics.

One of the prime reasons for this drastic employment drought is the mandated wage hikes that policymakers have forced down the throats of local businesses. Economic research has shown time and again that increasing the minimum wage destroys jobs for low-skilled workers while doing little to address poverty.

According to economist David Neumark of the University of California at Irvine, for every 10 percent increase in the minimum wage, employment for high school dropouts and young black adults and teenagers falls by 8.5 percent. In the past 11 months alone, the United States' minimum wage has increased by more than twice that amount.

Interesting, wouldn't you agree? And, certainly newsworthy.

Yet, from what I can tell, results of Google News and LexisNexis searches didn't find one major mainstream news outlet that offered such analysis in its reporting of Friday's unemployment rise.

As Lopez Eastlick pointed out, this is really a no-brainer:

You don’t need a business degree to understand why employers are making these cuts. The classic summer jobs — cashier, waiter, grocery clerk — can help an employer with increased service or make up for full-time employees who take vacations.

When the minimum wage gets boosted, however, employers cut down on hiring teens who typically fill lower-priority slots. Most of the work still gets done, but customers may get stuck standing in longer lines, and teens suffer because they’ve been priced out of work.

There’s no end to the economic data that confirm these common-sense observations. Research from the University of Georgia, the University of Connecticut and Cornell University indicates that increasing the minimum wage causes four times more job loss for employees without a high school diploma than it does for the general population.

Furthermore, minimum wage hikes don’t effectively target the people who are typically portrayed as the key beneficiaries — low-income adults raising kids. According to U.S. Census Bureau data, just 14 percent of those who benefited from the most recent federal minimum wage hike are sole earners in families with children.

Conservative economists have argued this very point for decades: minimum wage hikes not only don't act to reduce the income gap in our country, but also end up harming those at the lower end of the economic ladder.

Friday's unemployment data was a perfect demonstration of this maxim which sadly went unreported by media much more concerned with the November elections than actually disseminating the truth to the citizenry.

How sad for us all.

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Noel Sheppard's picture