This is the last time that we're going to feature an updated version of the following chart, showing the change in the number of employed Americans by age group since the level of total employment peaked in the U.S. just ahead of the so-called Great Recession.
Here's what we've learned after seven years of tracking this data, where we've focused upon teens (Age 16-19), young adults (Age 20-24) and adults (Age 25 and older):
- As bad as the "Great Recession" was for many Americans, it was harder on young adults and the hardest upon teens.
- The federal minimum wage increases of 2007, 2008 and 2009, combined with a number of state minimum wage increases, and without any meaningful economic growth to offset their combined negative impact, effectively removed 1.4 million teens from the ranks of the employed, a situation that only recently improved in just the past three months.
- That improvement came only after oil and gasoline prices began to fall dramatically in late June 2014, which provided the only significant stimulus to the U.S. economy in the past seven years. Americans responded by increasing their demand for things like fast food, which responded to the increased demand by hiring new employees at or near the minimum wage.
- The situation is slightly better for young adults, whose employment numbers have only just returned to their pre-Great Recession levels in recent months.
- Combined, U.S. teens and young adults account for approximately half of all Americans who earn wages at or near the minimum wage level.
- By contrast, Americans over the Age of 25 effectively recovered from the Great Recession as measured by their numbers among the employed over a year ago.
Looking at the present employment situation for teens and young adults, we find that there hasn't been any meaningful improvement in their employment prospects since October 2014. Meanwhile, U.S. adults have continued to gain jobs. The number of employed teens has held at a level that is 1.15 million below their November 2007 level, while the number of employed young adults has just dropped back underwater after having briefly risen above it.
That situation seems somewhat out of whack, especially as oil and gasoline prices in the U.S. have continued to fall, however we should note that 21 states in the U.S. were set to increase their minimum wages in January 2015. Nine of these states had relatively small minimum wage hikes, as they only adjusted their minimum wage to account for the rate of inflation. The other thirteen states increased their minimum wages by a larger percentage.
Meanwhile, the state of California imposed a very large hike in its minimum wage in July 2014. Unlike nearly all other states, teens in California have seen no improvement in their employment figures as a result of the entire U.S. economy being stimulated from falling oil prices.
We think those state level minimum wage hikes are limiting the gains that teens and young adults would otherwise be seeing as a result of Americans being able to benefit from not having to pay so much for oil and gasoline. That situation should ease somewhat as inflation helps wash out the effect of the state-level minimum wage hikes, but will ultimately be limited because of the negative impact of the next round of state level minimum wage increases that will be on tap for 2016.
It shouldn't take an economic detective to point out the obvious, but apparently, it does, because some people still haven't learned anything over all these years.
Labels: jobs
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