Blame the Minimum Wage for the 0.5 Point Increase in the Unemployment Rate

Mark Perry wonders if the large jump in the US unemployment rate was driven in part by the recent surge in the minimum wage.

Accoding to BLS data on unemployment rates by age, it looks like almost all of the .50% increase in May unemployment to 5.5% from 5% in April was due to increases in the jobless rates for young workers in the 16-24 year age group, especially the 16-19 year group (see chart above). For workers 25 years and over, the jobless rate has remained pretty stable at around 4%, compared to large increases from April for 16-19 year workers (+3.3% to 18.7%, the highest rate since 1993) and 20-24 year olds (+1.5%).

...Although it apparently hasn't received much media attention, perhaps there is a link between the rising unemployment rate for teenagers and the pending 12% increase in the minimum wage next month. Since we have evidence that consumers respond to higher gas prices by driving less, wouldn't it also be the case that employers of unskilled workers would respond to 12% increases in wages for unskilled workers by hiring fewer unskilled workers?

 

Comments

[spencer]

I suggest you look at the actual data rather then his post. Just before the minimum wage took effect the adult unemployment rate was 3.5%.

Do you really agree with a rise in the adult unemployment rate from 3.5% to 4.1% is remaining fairly stable?

Over the past year teen employment rose 0.9% and adult employment rose 0.08%.
Man that terrible minimum wage caused teen employment to only grow tenfold as mush as adult employment