Total Return S&P 500 CrystalBull
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Minimum Wage vs. Youth Unemployment

This chart shows the U.S. Federal Minimum Wage in relationship to the Youth Unemployment Rate*.  Also shown is the Real Minimum Wage (adjusted for inflation**).  Note the relationship between Youth Unemployment and periods of recession.  Note also that in periods of falling Real Minimum Wage, Youth Unemployment also fell.  Other than during the late 1990s (which could have been characterized as a period of near-full employment, or perhaps even a labor shortage), increases in the minimum wage corresponded to increases in Youth Unemployment.  Don't be fooled;  The laws of economics (supply, demand, price, cost) have not been repealed.  The rising cost of labor will lead to fewer laborers.

Lots of interesting dynamics here, open to debate and discussion.

NOTE: This chart shows the US Federal Minimum Wage.  It is critical to note that, in recent years, states and municipalities have led the way to increases in their own minimum wages.  Some cities now have minimum wages that are double the federal mandate.  Thus, the recent reset to higher youth unemployment may better correlate to minimum wage increases not obvious in this chart.

If one smooths the chart line, drawing the mean between the peaks and valleys, one will see the youth unemployment rate at a steady increase, as the federal, state, and municipal minimum wages have steadily risen.

* Youth Unemployment Rate is seasonally adjusted, workers aged 16 to 19 years.
** Prices adjusted by the CPI-U (Consumer Price Index for All Urban Consumers), chained to 1996 dollars.



( HINT:  Click-and-drag left-to-right on a chart to zoom in to a specific date range.  Double-click on a chart to zoom back out. )

  = recessions  
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