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It’s the Minimum Wage. No, It’s Illegals. Or Not.
Posted By Invictus On June 25, 2010 @ 9:00 am In Data Analysis,Economy,Employment,Politics,Taxes and Policy | Comments Disabled
On a somewhat related note to my recent Kudlow post (that means it’s Invictus here, not BR, boys and girls), I see that in some circles illegal immigrants are now being blamed for the high teen unemployment rate. First it was the minimum wage , now it’s illegals . Yawn. This is exactly the stuff that makes my blood boil — thoughtless, ideologically driven bullcrap that’s presented as fact, usually without any documentary evidence. Easy, quick sound bites. (A new post citing the minimum wage was just put up very recently here  at Professor Mark Perry’s Carpe Diem blog, and I would welcome his comments.)
What about demographics — an aging boomer population — and a crappy economy that has the 55+ cohort postponing retirement  and consequently crowding out the younger generation (parents keeping their own kids/grandkids out of the job market, as I put it a while back). The data is there for all who choose to explore it.
Take a good look at the charts at the Blah3  link and in another post over at Bonddad’s place  (yes, I’m a promiscuous poster) — they tell the story, as does the chart immediately below. I haven’t rerun them since putting up those posts last September (and again in November), but I’d be willing to bet not much has changed. (The chart below is fresh, and reinforces the theme.) Our demographics, coupled with a crappy economic environment, are conspiring to wreak havoc on teen employment. I really don’t think there’s much more to it than that. To be clear: I know there are some studies — usually authored by partisan think tanks or hacks on either side — that make both sides of minimum wage/illegals agruments. But I’d offer up two words: Occam’s Razor . And we know from the NFIB  [.pdf] that “Poor Sales” is the single largest problem facing small businesses, so it’s no surprise they’re not hiring. Citing demographics — which are exceedingly difficult to spin in a political context (i.e. they are what they are and — unless you’re China — generally free from policy influences) — just doesn’t cut it for many folks who need to find a way to assign blame. But the various charts I’ve produced elsewhere and below provide actual, numbers-driven evidence that demographics are likely the driving factor here (in addition to the fact that teens suffer disproportionately in any downturn in the first place).
And there’s also this, from an April story that appeared in the WSJ. It makes perfect sense, given the brutality of the job market:
The share of new high-school graduates enrolled in college reached a record high last year, likely reflecting the weak job market they faced.
Some 70.1% of the 2.9 million new graduates between the ages of 16 and 24 headed to colleges and universities, the Labor Department said Tuesday, based on data from January through October 2009. That percentage was a historical high for the data series, which began in 1959.
But no, instead of doing some thoughtful analysis and a bit of research, it’s just easier to say that rising teen unemployment must — just must! — be the result of “liberal” minimum wage policies and lax immigration enforcement.
As some may believe I’m revealing a liberal bias, I’ll respond by saying that I honestly don’t believe I’m doing any such thing. What I’m doing is looking at what the numbers are telling me, as evidenced by the chart above and those I produced elsewhere (B3 & Bonddad) on this topic. I’m open to discussion/debate/refutation of that data, but little has been forthcoming. And, for the record, I’ll state here that I think Obama and his team badly misallocated the stimulus in ways that did little to create jobs, unarguably its most important objective. And that will cost him dearly (as evidenced by yesterday’s third defeat of an unemployment benefits extension?).
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2010/06/its-the-minimum-wage-no-its-illegals-oy-vey/
URLs in this post:
 minimum wage: http://www.blah3.com/article.php?story=20090907102238880
 it’s illegals: http://www.bizzyblog.com/2010/06/09/teen-unemployment-cnbc-gets-close-with-worst-in-41-years-description/
 here: http://mjperry.blogspot.com/2010/06/job-killing-impact-of-minimum-wage-laws_18.html
 postponing retirement: http://thehiringsite.careerbuilder.com/2009/03/23/60-of-over-60-workers-postponing-retirement-finds-careerbuilder-survey/
 Bonddad’s place: http://bonddad.blogspot.com/2009/11/minimum-wage-canard-revisited.html
 Occam’s Razor: http://en.wikipedia.org/wiki/Occam
 NFIB: http://www.nfib.com/Portals/0/PDF/sbet/sbet201006.pdf
 Image: http://www.ritholtz.com/blog/wp-content/uploads/2010/06/Book2_26289_image001.png
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