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Low-skilled Labor is Being Forced Out of Job Market
ST. LOUIS, MO, (SLFP.com), June 3, 2007 - In May, teen unemployment shot up to three and a half times the national unemployment rate, according to the U.S. Labor Department's monthly jobs report.
The Employment Policies Institute (EPI) warns that the number of jobs held by the least skilled and the least educated have fallen, and the trend will continue as minimum and "living" wage laws increase wage rates beyond productivity levels. Despite research from leading universities showing that increasing the minimum wage destroys entry-level jobs, President Bush recently signed a bill increasing the federal minimum wage.
The Labor Department's statistics show that overall unemployment held steady at 4.5%, but teenage unemployment made a significant jump, rising to 15.7% from 15.3% -- its highest level since last September. Employment among high school graduates fell by 375,000 employees, and their unemployment rate is the highest it has been since last August. High school dropouts aren't faring well, either, as their employment declined last month by 2%. And while African American teen unemployment fell slightly to 30.4% from 30.6%, it remains over six and a half times the national rate.
Decades of economic research conclude that mandated wage hikes eliminate entry-level jobs, putting particular pressure on minorities and the low- skilled. A study from Cornell University shows that young African Americans typically bear almost four times the employment loss of their non-black counterparts after a minimum wage increase. Specifically, every 10% increase in the minimum wage results in a 8.5% decrease in employment for young black adults and teenagers. Research from Dr. David Neumark of the University of California, Irvine supports these results.
"Government-mandated wage hikes are largely to blame for the fact that there are fewer jobs available to the low-skilled workforce," said Dr. Jill Jenkins, chief economist for the Employment Policies Institute. "Businesses adjust to minimum wage hikes by cutting jobs and hours. And decades of economic research shows that teens and high school dropouts feel the brunt of employer cost-cutting."
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