Cook County teens will have even more free time this summer whether they like it or not, according to financial researcher Jack Salmon.
Salmon, an analyst at the Mercatus Center at George Mason University, predicts the minimum wage increase slated to take effect in the county on July 1 will reduce the teen employment rate by as much as 10 percent.
“Studies show that for every 10 percent increase in minimum wage there is a 1 to 2 percent fall in youth and/or unskilled labor force employment,” he told Chicago City Wire. “From this we can surmise that a 30 percent increase from the current $10 to $13 by 2019 will result in a further decline in youth employment.”
Salmon's concern follows a recent JP Morgan study that found that the summer employment rate for teenagers in 15 U.S. states now sits at a historic low of 34 percent.
“When you consider that around 13.5 percent of the population of Cook County are below the poverty line, denying the youth the skills they need to kick-start their careers will only serve to worsen this already bad situation,” he said. “What I think we will see more of as a result of higher minimum wage is greater machination in low-skill industries; for example, self-service machines in McDonalds replacing cashiers.”
Seattle suffered through the largest three-month job loss in state history last year after raising the minimum wage to $15 an hour. Undoubtedly, many of those most impacted were unskilled teens looking for their first opportunities.
“I think Seattle is a blueprint to some extent,” Salmon said. “In cities and states with lower average incomes and higher rates of poverty, the effects will be detrimental.”
Salmon also has a theory about why a minimum wage hike is often pushed despite the statistics.
“Politicians who push agendas of social justice tend to be electorally successful,” he said. “Those who cite empirical evidence are often said to be ‘in bed with business.’ However, it is not big businesses that suffers from minimum wage: it is those operating at the margins, small- and medium-sized businesses, and more importantly, their employees.”
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