How Government Creates Unemployment

Economics isn’t hard, unless you’re a liberal. Republican governor Chris Christie mocked a network graphic insisting that 55 percent of New Jersey residents think he’ll be Vice President and 68 percent don’t. In case you don’t see the problem with these numbers, 68% + 55% = 123%. We’ve heard about giving “100 and 10 percent,” but that’s a sports number. Christie remarked about the 123% number, “That sounds like Democratic math!” Indeed.

The same is true when it comes to things like youth unemployment. They can’t understand how the unemployment numbers for teenagers is so high. It’s quite simple: minimum wage laws.

It used to be that when two people competed for the same job, the person who could undercut the cost an employer had to pay was in the running for the job, even if he didn’t have a lot of experience.

An employer could take a risk on someone with a lack of experience because he didn’t have to pay him what an experienced worker might demand. Many of the jobs available to teens were low skilled anyway.

By making it illegal to pay someone less than a government-mandated minimum wage, those with less experience are at a disadvantage. Employing teenagers is now a classic Catch-22 dilemma.

“Do you have experience?,” the shop owner asks.

Knowing how to add, the teenager is honest and shows initiative by answering, “No, but I’m willing to work at a lower wage to gain experience.”

“Sorry,” the shop owner says. “I would be breaking the law if I hired you for any amount less than the minimum wage. I can hire someone with experience at the same wage I’d have to hire you.”

“But I can’t get experience if you won’t hire me.”

“Tough luck. Write your congressman.”

Brian Levine, co-owner of Tropical Smoothie Café knows how to add, but he also knows the law and the logic of the market place:

“A lot of it comes down to what we can afford, versus the hours they’re available to work. We are more or less, the minimum wage type of place. I would obviously prefer to pay minimum wage, but I’d also go for an adult and pay them an extra dollar an hour. They’re available, have more experience and are quicker to train.”

Renee Ward, founder of job posting site Teens4Hire.org, can also add. “If you have two candidates for a job, and one has experience and will take $10 an hour, and the other is a teen with no experience, who do you think would get the job? When jobs aren’t there for anyone, it’s that much harder.”

Once again, government is the problem not the solution to job growth.