Follow Up on Youth Unemployment: Minimize Government Intervention
September 19, 2010 Leave a comment
Eric Waters, Columnist
Shortly after writing my previous article on youth unemployment, it became clear that simply pointing out a problem was not enough. We must ask another series of questions in order to try and solve this catastrophe. What are the underlying problems causing the resulting symptom of youth unemployment? Where, when and how should the government become involved? And where the government must intervene, what policies can be put into place to maximize economic growth and hiring? Of course, with such a dynamic economy and huge government oversight, we only will be scratching the surface, but the fundamental causes of the economic depression of youth raised here will provide a foundation for deeper examination.
The easiest place to point fingers is the current state of the economy. Without starting a political argument as to why the economy is as bad as it is, let’s look how it has affected youth unemployment. Naturally, in a downturn of this magnitude businesses are hesitant to hire. The youth is affected disproportionately because we tend to be the least skilled in the workforce. Unfortunately, we are the first to be laid off and the last to be hired. Another side effect of the downturn in the economy is the delay of retirement for millions of baby boomers. I remember hearing as a senior in high school, and subsequently in college, that my generation would be put onto a fast track in the corporate world due to the end of the baby boomers’ working lives. Well, if they are not retiring, the businesses are not looking to replace them. So, how can we best get wheels of the economy turning again?
The fastest, easiest way to do so is the reduction of taxes. The Bush tax cuts are set to expire at the end of this year if the Obama administration does not act to extend them. One of the best ways to continue to watch the economy tighten instead of blossom is to decrease the amount of money in people’s pockets by raising taxes. Otherwise, let’s do the right thing and keep money in the pockets of the people that earned it. This will get small businesses hiring and people spending; both of which will help get more youth into the workplace.
Another problem that may not be as obvious is the minimum wage. Digging a little deeper, we find that arbitrarily raising the minimum wage is more harmful than beneficial. Halie Anderson wrote in an article in Journal News, “Between 2007 and 2009, the hikes in minimum wage reduced employment for teens aged 16 to 19 by 12.4 percent, which translates to about 98,000 fewer teens in the work force.”
I don’t know about you, but I would prefer to have almost 100,000 additional teenagers saving for college, saving for a car, or simply, just for making money. The article goes on to state: “Although some argue that the minimum wage should be higher to reduce poverty…they are not taking into consideration that most minimum wage earners aren’t poor.”
This should calm those of us who argue that the minimum wage must be raised to what is called a “living” wage. Again, it seems that the government has another field where it would be better off to let the free market decide wages. If a ready, willing and able person will perform a job for five or six dollars an hour, why would the government prevent him from doing so?
As you can tell, I generally prefer less government intervention when it comes to youth employment. Does anyone feel otherwise? I would love to receive comments on this topic in agreement or disagreement. And to those who disagree, let’s find some common ground. Ultimately, we are all looking to improve the lives and well being of generation Y.