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  • Government Makes It More Difficult for First-Time Job Seekers

    Last week, the U.S. Department of Labor released its Employment and Unemployment Among Youth—Summer 2012 report. While many youths (ages 16-24) found a summer job this year, many did not even try. Fully 39.5 percent of the youth population neither worked nor looked for work this summer. This number has trended upward over time—it is almost double the rate (22.5 percent) from July 1989.

    Of those who looked for work, many could not find it. The youth unemployment rate in July 2012 was 17.1 percent. By comparison, it was only 12.4 percent in July 2000 and 10.8 percent in July 2007. For men, blacks, and Hispanics, the youth unemployment rates in July 2012 were worse—at 17.9 percent, 28.6 percent, and 18.5 percent respectively.

    Why are fewer youth participating in the labor force, and even fewer working? In part, because a bad economy always hits younger workers harder. The central problem with the labor market right now is a dramatic slowdown in job creation. While job losses rose at the start of the recession, they have since returned to pre-recession levels.

    Hiring, meanwhile, has not recovered. Unemployment remains high because employers are creating fewer new jobs. This makes it much harder for those without jobs—like the youth—to find them. It also allows employers to become more selective in the people they do hire. That often means hiring older and more experienced workers.

    Government policies have made this difficult labor market even worse for younger Americans. In 2007, Congress voted to raise the federal minimum wage to $7.25 an hour. Half of minimum wage earners are between the ages of 16 and 24. Raising the minimum wage, in addition to employer paid Social Security, workers compensation, and unemployment insurance prices many young workers out of the job market. An inexperienced high school student may not produce enough to be paid $7.25 per hour plus Social Security, workers comp, and unemployment insurance. As a result, since an employer is not allowed to pay her less by law, she is not hired and misses out on the job experience she needs to get a higher paying job: two-thirds of minimum wage workers earn a raise within a year.

    Employers looking forward a year and a half to 2014 surely understand that. As stipulated by Obamacare, there will be a $2,000 annual tax for any worker they do not offer health insurance to. Such per-employee taxes contribute to the lack of entry-level positions.

    Many younger workers are in school, but employers weigh both educational attainments as well as work experience when hiring. Education is not everything. Experience learned at a person’s first job is built on later in life as the person climbs the socio-economic ladder. It is a classic catch-22: The young person needs a job to get experience, and needs experience to get a job.

    Research shows that teenagers in states with higher minimum wages have lower earnings a decade later—forgone experience has serious costs. Labor force participation of 18- to 24-year-olds has trended down, while their unemployment has trended up. Fewer youth are learning on the job. The government reduces young Americans’ ability to find work and gain valuable experience when it makes hiring them more expensive.

    Posted in Featured [slideshow_deploy]

    6 Responses to Government Makes It More Difficult for First-Time Job Seekers

    1. Edward Gill says:

      Government Makes It More Difficult Shit man http://bit.ly/RmJJS7

    2. Howard Lauther says:

      Oh, puhleeeeeeze! To suggest that younger workers are not being hired because the minimum wage is too high is absurd. Let's flip that argument on its head, shall we? Are you suggesting that OLDER workers are perfectly willing to work for less than the minimum wage and will take whatever the employer chooses to give them?

      • Bobbie says:

        how about no government costs to determine wages for businesses that the independent businesses handle on their own accord with all business matters taken into accord? That's why we need exactly what Blair said: honorable, sensible, respectful leadership/Romney and Ryan!

      • Nana satchell says:

        seniors accounted for the largest increase in workers employed..they have experience and a strong "work
        ethic"in lieu of "entitlement mentality"employers appreciate and before Obamacare mandates employers provide insurance coverage for part-time employees and their families,employers hired "retired"persons
        receiving Social Security(not an "entitlement"but a pension plan they paid into all their working days and one that stipulates if they make over a certain amount in any job,they will be taxed more or lose some of their Social security benefits which the majority on "fixed incomes"could not afford.

    3. Blair Franconia, NH says:

      That's why we need Romney-Ryan.

    4. Bobbie says:

      Obama's goal isn't to make life easier for people he doesn't like. He's in position to abuse and go out of his way to make sure it's harder on some no matter how unconstitutional he is. Exactly why we need honorable people, Romney/Ryan leadership! If there are any words to hold Obama to, it's "if I can't get this done in my first term, I'll be a one term president!" America has to make sure he lives up to those words because he doesn't live up to any of his own!

      Herman Caine would've had a 2nd term!!!!!

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