My son is at the age in high school that he needs to find a job, either during the summer or after school or both. But this is not an easy chore. The economy certainly has a lot to do with this, but Congress has been doing its share to keep teenagers unemployed as well:
Thanks to an ill-advised law enacted with bipartisan support in 2007, the cost of providing an entry-level job to individuals with few skills or minimal experience will be going up by more than 10 percent. Those who cannot find a job paying at least $7.25 an hour will not be permitted to work. Welcome to the latest chapter of America's minimum-wage folly.
Those who press for a higher minimum wage often claim that making entry-level jobs more expensive won't reduce the number of entry-level jobs. Were the government to compel a 41 percent increase (see graph above showing the 41% increase in the minimum wage from $5.15 in 2006 to $7.25 this year) in the price of gasoline or movie tickets or steel, every rational observer would expect a drop in the demand for gasoline, movie tickets, or steel. Yet when it comes to the minimum wage, politicians and journalists somehow persuade themselves that making workers more expensive won't reduce the demand for workers.
But that's exactly what it does. Artificial price floors - mandatory minimum prices set higher than what the market will bear - generate surpluses. Minimum-wage laws are no exception. The price floor imposed by the government on the supply of low-skilled labor results in a labor surplus, which is just another way of saying higher unemployment.
The laws of supply and demand are not optional. They weren't enacted by Congress and Congress can't override them. Minimum-wage laws don't make low- and unskilled Americans more productive, more experienced, or more desirable. They merely make them more expensive - and more likely, therefore, to be unemployed.
People often think of the minimum wage as a restriction on employers -- that they cannot pay less than a certain number for a job. But it is also equally a restriction on job seekers -- my son cannot legally offer to take a job for less than $7.25, even though he would probably gladly do so. For teenagers, just gaining the experience of working and building basic skills (like showing up on time, following procedures, interacting with customers and fellow employees) has enormous value, such that even a nominal payment of a few dollars an hour would more than compensate him for his labor.
But I think there is another factor that increasingly limits teenage jobs that is not often discussed - liability. I never really thought about this until I was running a business and found that my company and I may be personally liable for bone-headed decisions made by far off employees I have never met. In our super-ligious society, does a company really want 15-year-old boys interacting with the public, no matter how much or little they are paid, when even one teenage-boy-style flip comment or sexual joke might result in a lawsuit?
Previously, I have written a number of articles on the minimum wage focused on the other end of the age scale. My company hires folks in the seventies and eighties, a practice that is increasingly difficult to maintain with the minimum wage increasing.