Sunday, December 13, 2009

Teenage Jobs and their Minimum Wage

Youngster and teenage employment has fallen sharply since July. A minimum wage hike-like trend may be a factor. Several, but mostly economists expect the minimum wage, if it has any effect to raise and increase employer costs and therefore reduce employment, specially among those who are willing and more likely to work in minimum-wage (min wage) jobs, in this case teenagers and restaurant workers.
In 2007 in the US, the federal minimum wage per hour changed. The wage has for the first time in 10 years, significantly changed, firstly; with a steady increase from $5.15 - $5.85. $6.55 was the later increase, and yet again, this July, it peaked to $7.25.
In addition, a law in the US still permits employers to pay more than the minimum; economists may agree that a low minimum wage has smaller or minor effects than a high min wage.
Inflation-adjusted federal min wage had gotten one could argue, to its lowest in decades by early 2007, so the July 2007 increase should or may have had the smallest effects of the three.
However, in July 2009 when they increased the wage one could argue that the largest effects should have taken place. In this case, mostly because of the 2 previous increases. Also another binding factor would be the deflation, which had gotten the inflation-adjusted min wage high.
For instance, if we would set a seasonally adjusted index in this case: the number of the people between 16 and 19 years old with steady jobs as a benchmark from July 2009. Then, in addition, this would tell that this latter mentioned group would be mostly affected by minimum-wage legislation.
Of course, one has to take into consideration that during recession’s employment will for sure be falling for all groups.

But in conclusion, the 2009 minimum-wage increase did significantly reduce teenage employment.
Something Obama will be praiseful for!


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