The Minimum Wage Myth

As unemployment continues to rise and talk of a jobs stimulus circulates some are advocating for another increase in the minimum wage. But such a move would destroy jobs instead of spurring employment, especially for younger workers.

Under President Bush the minimum wage increased from $5.15 to $7.25 over the last 3 years. But instead of aiding unskilled workers it actually hurt their ability to find jobs. Unemployment among white youth age 16-19 is at a 10 year high, with 25.3% unemployed in October – up 36% from a year ago. Among African-American youths, the unemployment rate is 41.3%, up 25% from 2008, and young Hispanics have a 35.6% unemployment rate.

Numbers from the Bureau of Labor Statistics show a rise in unemployment for the 16-19 age group immediately following the last three minimum wage increases.

minimum wage chart

Source: Bureau of Labor Statistics