The Chart That No Minimum-Wage-Supporting Socialist Wants You To See

Tyler Durden's picture

Submitted by Jack Salmon via The Foundation for Economic Education,

A new report from JP Morgan Chase & Co. finds that the summer employment rate for teenagers is nearing a record low at 34 percent. The report surveyed 15 US cities and found that despite an increase in summer positions available over a two year period, only 38 percent of teens and young adults found summer jobs.

This would be worrying by itself given the importance of work experience in entry-level career development, but it is also part of a long-term trend. Since 1995 the rate of seasonal teenage employment has declined by over a third from around 55 percent to 34 percent in 2015. The report does not attempt to examine why summer youth employment has fallen over the past two decades. If it had, it would probably find one answer in the minimum wage.  

Most of the 15 cities studied in this report have minimum wage rates above the federal level, with cities such as Seattle having a rate more than double that. Recent data from the Bureau of Labor Statistics seen in the chart show exactly how a drastic rise in the minimum wage rate affects the rate of employment.

Seattle has experienced the largest 3 month job loss in its history last year, following the introduction of a $15 minimum wage. We can only imagine the impact such a change has had on the prospects of employment for the young and unskilled.

Raising the minimum wage reduces the number of jobs in the long-run. It is difficult to measure this long-run effect in terms of the numbers of never materializing jobs. However, the key mechanism behind the model—that more labor-intensive establishments are replaced by more capital-intensive ones—is supported by evidence. That is why recent research suggesting that minimum wages barely reduce the number of jobs in the short-run, should be taken with caution. Several years down the line, a higher real minimum wage can lead to much larger employment losses.

Nevertheless, politicians continue to push the idea that minimum wage laws are somehow helping the young “earn a decent wage.” It is important to remember the underlying motives behind pushes for higher minimum wage rates. Milton Friedman characterized it as an “unholy coalition of do-gooders on the one hand and special interests on the other; special interests being the trade unions.”

Several empirical studies have been conducted over the course of more than two decades, with all evidence pointing toward negative effects of minimum wage rises on employment levels among the young and unskilled. A study conducted by David Neumark and William Wascher in 1995 noted that “such increases raise the probability that more-skilled teenagers leave school and displace lower-skilled workers from their jobs. These findings are consistent with the predictions of a competitive labor market model that recognizes skill differences among workers. In addition, we find that the displaced lower-skilled workers are more likely to end up non-enrolled and non-employed.”

Policy makers who continuously raise the minimum wage simply assure that those young people, whose skills are not sufficient to justify that kind of wage, will instead remain unemployed. In an interview, Friedman famously asked “What do you call a person whose labor is worth less than the minimum wage? Permanently unemployed.”

The upshot: Raising the minimum wage at both federal and local levels denies youth the skills and experience they need to get their career going.

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Shadow1275's picture

Who's peddling fiction now Obummer?

LetThemEatRand's picture

I'm not disagreeing the basic premise that minimum wage increases can result in job losses for obvious reasons, but this chart does not tell us anything.  It is not limited to minimum wage jobs, and I note the chart sitll has job numbers well above where they were a few years ago, and there is even a recent uptick at the end of the chart.   If the author wants to prove his point, put up a chart of lost minimum wage jobs.

knukles's picture

Oh, but it's all so clear and easy.
Minimum wages did not cause job losses.  What cause them is lack of jobs meaning the gobermint needs to create more shovel ready jobs (for illegal immigrants because no US citizen will do them)

greenskeeper carl's picture

My first job was getting paid 6 an hour at a nursery, where I sat outside all day loading heavy bags of mulch, rocks, pine straw, etc into people's vehicles. I was 16 years old, and happy to have that job at that wage to have my own money. There were 5 or 6 of us in that same age group that did that job, and I doubt all those jobs would have existed if the company was forced to pay us 12$ an hour to do mindless manual labor.

I wasn't worth any more than that, since it doesn't require any brain power, just a relatively strong back, to do that job, but I had the money to do fun things with my friends, go on dates, and pay my car insurance, etc. I'm glad that entry level job existed, since stuff like that, an entry level job, isn't intended to support a family. Making companies pay these people more than they are worth is hurting them in the long run.

greatbeard's picture

>> My first job was getting paid 6 an hour

How many years ago was that and what was the minimum wage then?

greenskeeper carl's picture

2001, and I had to look it up, it was 5.15 an hour. So I was actually considered worth more than minimum wage.

RAT005's picture

Great story. And another perspective is at some minimum wage much higher you were competing against skilled labor driving an expensive fork truck.  At a low enough wage the solution is a few students like yourself.  Also important is the notion that your minimum wage was used to add to your life while being dependant on your parents for many things.  Minimum wage is not meant to be a living wage.

My story was lifegaurding and teaching swim lessons during High School at the YMCA for $2.70/hr in 1980, that was minimum wage.  After high school I always did more skilled jobs at more than minimum wage.  My first job after getting an engineeing degree in 1986 was $8.66/hr.  It was a little low but liveable even with a small student loan to pay.

Kiwi Pete's picture

$5.15 in 2001 isn't the same 15 years later. So you were happy to earn over minimum wage then but you're not happy for others to earn over minimum wage now. Right!

Goonions's picture

This is what you are missing.  He was a 16 year old kid in a part time job.  The problem now is that those pushing all of these $15 per hour minimum wages are trying to make part time entry level jobs pay enough to support a family.  That does not work.  It is not meant to work.  Funny how during the Bush years all of the Democrats wanted to say the jobs created were to flip burgers.  The Dems promised all of these "follow your dreams" history majors to rack up all of that college debt for jobs that are not there.  Now that it is an utter failure those same people want to say that people can earn a living flipping burgers.  

The problem is that our Dem overlords know nothing about creating jobs.  Face the facts.  Working at a burger joint is not a way to make a living.  The basic business model for those companies is to hire a full time manager, maybe a full time assistant manager and the rest are part time teenagers or college students.  What about that do you not understand?  

I am a 55 year old white male starting over after doing nonprofit work for 20 years.  I work part time at $10 per hour and am building up my own business on the side.  My job function might be worth a little more due to the fact that I actually have a work ethic and give my employer his money's worth.  But, it ain't worth $15 per hour. 

undertow1141's picture

That right, he earned it. These assholes want to demand it. 

Its about value. No fast food worker is not a career. Repeat that slowly Kiwi. Fastfood is not a career. Walmart greeter is not a career. Minimum wage jobs are not for raising a family on.

Now force a $15/hr wage minimum.

What do you tell the guy/gal making $12/hr supervising the minimum wage zombies?

That they make the same as their peons now? Or do you give them an appropriate raise to $19/hr?

And this trickles up the pay scale until it drive prices up high enough its like the bottom never got a raise. But the number on their check is bigger so I guess according to your logic they won. By mine they got fucked.

rockface's picture

Hey Kiwi Pete!  What was the accumulated debt in 2001?  Bush increased the debt significantly and then Obama went wild and doubled the total accumulated debt since the begininning of the Republic. The American people are going to pay for their idiocy in electing economically illiterate fools.  Don't worry about minimum wage worry about living off a ration card.

MagicHandPuppet's picture

...Because the goobermint knows exactly how much the least valuable person's work is worth and would never lie about it to essentially bribe the least valuable people in society for their votes. [/sarc]

Citxmech's picture

Minimum wages clearly reduce the number of lower paying jobs - but they also effect the cost of social services on society.  

Essentially what the govt is saying is that there will only be jobs that can support a person at some line above the poverty level. 

I want to see the chart that shows the net welfare cost to society as fewer people get arguabley better paying jobs, but the slave wage part-timers get kicked to the curb and are forced on the dole.  Not sure what that'll show, but I think it needs to be included in the mix.

All Risk No Reward's picture

Discussing the minimum wage while not discussing the fraudulent debt-money system is akin to discussing the inherent risks of deck chairs on the Titanic without mentioning the risks of hitting an iceberg at too high a rate of speed.

It's the money system, people.


DeadGuy's picture

I'll see your 6 and raise you -5.25...  1964 - $0.75/hr. and it was great to not have to ask the old man for gas money...

Lost My Shorts's picture

The neofeudals never stop whipping that minimum wage horse.  Never mind that the most prosperous period in American history followed the introduction of union wages well above market levels.  Just whip harder.

That chart in Seattle is indeed very hard to interpret, for ten different reasons, including:  1) Seattle is a boomtown, subject to big changes in employment related to a boondoggle hole they are digging in the ground; a new billion dollar sea wall on the waterfront; a new streetcar line; a new subway line; a half dozen schools under construction; and waves of apartment construction.  Choppy employment is guaranteed as a result of megaprojects coming on and off line.  2) Some job losses will come from soaring real estate prices driving up rents driving small business out of business or out to nearby cities and towns.  Also some of those job losses come because high rents squeeze all the discretionary cash out of residents, causing them to spend less at shops, bars, and restaurants.  Rents are up 50% in Seattle in four years.  Go there if you want to see what a "high rent desert" is.  3) Some of those jobs in Seattle did not disappear, but just moved two blocks over the city limit to a place with only the Washington state minimum wage (still higher than federal).  4) Some of those jobs disappeared because there is no one to fill them.  Seriously.  Any recently-bathed non-felon could get a minimum wage job tomorrow (who is willing to work the famous "whenever they tell you" flexible totally unpredictable hours).  But $15 per hour is not so great if you have to commute an hour to the job.  Even $15 is not close to a living wage in Seattle, as rents soar and Chinese investors Vancouverize the place.

LetThemEatRand's picture

Minimum wage laws are a band-aid on a cancer growth in my view.   Keeps the patient thinking he's doing a little better, but fails to cure the underlying problem and in fact makes it worse because the patient does not seek real treatment.  That is why Bernie does not interest me.  His idea of "fixing" things is to play around with minimum wage, income tax, and other things that will absolutely nothing to change the root problems facing America.  

daveO's picture

You're too nice to Sanders, he's an imbecile, at best. More likely, just another conniving tribe member. Minimum wage laws aren't even a bandaid, they are more like acid being poured into a gaping wound. They will force companies to automate or lay off. Several years ago, before this min. wage debate, MCD was testing out US drive thru order takers located in India. Shaniqua is gonna have to go back on full welfare, which was what the conniving Democrats want, anyway. 

Corporations have used DC to export jobs for nearly 50 years to slave colonies, relatively speaking, while the differential of output is papered over with more US debt. Whereas, before 1971, it required cold hard gold. 

Vlad the Inhaler's picture

It's true but as long as the government is coercing people to spend a certain amount of money each month, they should make it possible for them to do so.  If we were ever to restore a free market, then perhaps we could ditch the minimum wage, but until then it will need to keep up with the rising cost of living otherwise people will revolt.

moneybots's picture

"The neofeudals never stop whipping that minimum wage horse.  Never mind that the most prosperous period in American history followed the introduction of union wages well above market levels. "


Out of context, though. The U.S. was producer to the world after Japanese and German industrial capacity was destroyed after WW2. It was a unique moment in time, that had no perpetual basis. It was a boom time and all booms come to an end. Wages, relative to inflation, peaked out after the U.S. was forced off the gold standard in 1971. With disinflation, after 1980, unions declined. China came out of the wilderness and sucked industrialization into its vacuum.

Democrats always love to point out how great things were in the 1950's, when the top tax rate was 90%. Correlation is not causation. Look at how bad things are in France with a 70% top tax. Hollande went to 75% and had to drop it back.

Every cycle comes full circle. There is never any preventing it.

blackkitty's picture


Every country rebuilt and experienced their own boom. They produced their own goods and services. They didn't import anything from Murica. They didn't have massive cargo container ships back then. So everything from cars to refridgerators to radios was built in their own persepctive countries. How many fucking Fords were there in Italy, France, Germany in 1950's and 60's? Zilch except what was left over there after the war.

Italy -
Germany -
France -

epicurious's picture

Lost your shorts

The reason there seemed to be a wonderful economic environement simulataneous with the introduction of union wages had absolutely nothing to do with unions and their success in forcing wage s concessions.  It was the fact that at that time the USA had the only viable industrial base after the destruction of Europe and Asia in the WWII.  Frankly your wonderful union wages could certainly have been a contributing factor to the great orchestrated migration of jobs overseas once Asian and European industries got a foothold.  The best solution is to force all recipients of public support to prvide some form of active participation in the form of public service.   A lower minimum wage is needed as most here agree to allow entry in the market at the most minimal skill levels.



RockyMountainDreaming's picture

Comments like this are worth braving the ZH comment sections for.

tmosley's picture


I don't think you get it. Dictating wages is more a feature of feudalism than allowing the market to set wages.

Not everyone has to have the "minimum amount needed to live", whatever that is. Teenagers live with their parents. Some people just want some extra income. People like me have very low cost structures because we worked hard and paid for our shit in cash.

Also, you don't understand the scientific method. A prediction was made, then tested, and results confirmed the prediction, to the day, seemingly. Suggest you study up on Bayesian logic rather than just coming to a conclusion and then going back and finding a bunch of stuff to justify it. You can make predictions based off of your preferred system and test them! You just have to do it, and not ignore the evidence when it comes in against your favored theory.

undertow1141's picture

You mean if I prove myself wrong I should adjust my belief to fit facts and not presumptions? That might kill a lot of progs, heads would explode. Entire lives built on incorrect socialist ethos.


I find it funny that, and I'm not knocking you TMos I agree with you, people keep thinking an employer owes them anything other than the agreed upon amounts in a check. And to stay open for business so they keep getting that check.

You employer owes you nothing, you are a machine in the business not much difference between you and a blender, just a tool. Its your time to sell yourself while you are at work. Show you are not just a screwdriver, your a much more useful tool. You'll pay more money for a tool that does more than one job, its more useful, thus worth more. And as you prove you are worth more you should be paid more, but that between you and your employer. If they won't buy you for the price you will sell yourself for (because this is what it really is) with your usefulness, you find somebody who will. 

The min wage should be zero. This is should be true because no one should agree to sell themselves (time is life and it don't get refunded if you break it) for nothing. Who would go to work for no pay at all. The Wage hikers will tell you this would happen if the corps had their way. But if you apply one ten thousandth of a grams of logic, you would see fallacy. How can the corps get people to work for free. Go ahead ask around, find someone who would work for free, I'm not talking voluntary charity work, think of your job, would you do it for free? Ask around, I'll wait......................

See nobody.

So the problem isn't wages or companies. It people. People who sell themselves too cheap. If nobody accepted a job for less than $20/hr (I mean nobody at all) the natural minimum wage would be $20/hr and everybody would offer it.

But.............. people will whore themselves for quite cheaply it seems in reality.

The company didn't make you or Jose or Tyrone or Jim-Bob or Lu-Kim or whom ever sell out at 7.25 but you did because you know someone else will. Now the curve ball. This low ball seller problem can be directly traced to people who will work for anything just to stay here. And top that sundae with jobs offshoring due to free trade which killed the middle class. And you get a shit load of people trying to get the ever smaller and smaller puddle of jobs. And people take less and less until we get a minimum wage imposed by force. 

Companies are not evil per se, they are single minded soulless money machines, this shouldn't be shocking. Its the soulless profit driven(as it should be) that make them look evil. But they have no power to make you whore yourself for an amount you don't feel comfortable with. That's on you.

I found I could not find an employer who would pay me what I know I am worth. So you know what I did? OH guess guess......... I started my own business and became the asshole who pays me what I am worth. I set my minimum wage, as should you, all.

Go ahead and repeal the min wage and lets find out how cheap these whores really are. Or fuck it make it $30/hr and see how quickly that becomes not enough to be a livable wage.

I wanna see the wreck.


True Blue's picture

I want to know what price inflation the region has seen over the same time period, both housing and goods/services.

TruthHunter's picture

There's more;

One city can't make a difference when the entire economy is structured to depress direct wages.

When a significant percentage of the low income wages are not paid directly by employers,

but by government, it is difficult to persuade business to support higher minimum wages.

There's always the perception that some one else pays(might pay) that portion covered by taxes and borrowing.


When there is an excess of low skill workers(China) without regulation, wages will be driven to a wage a  slavery level.


 IMHO, any country that doesn't pay production workers a world standard minimum wage(doesn't have to approach our own) should

be subject to tariffs.

ZD1's picture



"Since 1995 the rate of seasonal teenage employment has declined by over a third from around 55 percent to 34 percent in 2015."



Government mandated increases in the minimum wage is one factor, another factor is the flood of immigrant labor that has displaced native-born kids from jobs at higher percentages rates than adults.

The majority of American teenagers learned valuable life lessons about earning money and taking responsibility until a series of immigrant amnesties and porous borders started replacing them with cheap immigrant labor.

An audit by the U.S. Inspector General found there are 6.5 million U.S. Social Security Numbers for persons 112 years or older on the active Social Security roster and “confirmed that illegal aliens were using deceased number holders’ names and SSNs to work, but U.S. Attorneys in California, Arizona, Florida, and South Carolina declined prosecution.”


undertow1141's picture

But those immigrants only take jobs Americans don't want. Like fast food, restaurant kitchen, mowing lawns, etc etc these aren't jobs Americans don't want these are the jobs for American teens and young adults. Agriculture/produce picking is the job we should require welfare recievers should do for that check. 

milking institute's picture

That is the propaganda srpead by the open border cartel for years. the fact is americans do'nt want to those jobs BECAUSE those wages have been driven into the ground by illigal immigration.  the second propaganda lie is the "who is going to pick your lettuce?" anybody living in california knows that big segments of the economy have been taken over by illegals: construction,food services etc and that movement is spreading into higher wage jobs on a dayly basis.  i feel sorry for the kids trying to find a summer job or a starting position in ANY occupation. on the higher paying professional jobs they are beeing fucked by the H1 visa immigrant flood.    yes,your government is surely working for the people,foreign people....

tricorn teacup's picture

Americans don't want those jobs because the welfare dole is too comfortable.

rubiconsolutions's picture

I probably sound like a broken record but....if I choose to accept of my own volition an employment contract for less than some arbitrary government mandated minimum will my employer and I be fined or even imprisoned? 

Seasmoke's picture

How did we ever survive on minimum wage @ $3.35 ?????

KnuckleDragger-X's picture

Ask the record number of unemployed what their minimum wage is and you'll get an answer, but not the ones the social justice warriors want. Stupid in all ways, and at all times is now our national policy, and only a full reset will change anything, though not likely for the better if your a sheep.....

Son of Loki's picture

<< How did we ever survive on minimum wage @ $3.35 ????? >>


My Dad had two jobs ... that's how. No pissing and whining about the names of buildings or the Confederate flag ... no $6.85 mocha latte frappaccinos with extra whipped cream + sprinkles ... no $3.25 krispee kreemed donuts ... no $625 iPhones to tweet playful nothings all day long ...

... you just worked and got the job done as well as paid your bills and were frugal as hell living within your means, eating broccoli and potatoes with as little debt as possible.


That's how.

Consuelo's picture

When taking the family out to dinner was considered a 'treat'.    And it happened no more than 3 or 4 times ----- a Year...

tmosley's picture

Since I started cooking for myself, I can't even stand to go out to eat anymore. Even if the food tastes good, they put something in it that just makes the snot start running. Possibly related to the multiple pounds of salt they bury everything in.

The internet will give you world-class recipes and show you world class techniques. Literally the only reasons to eat out is laziness or gatherings that are too large for you to cook for yourself.

Takeaction2's picture
Takeaction2 (not verified) Son of Loki Mar 6, 2016 12:08 PM

My parents taught the same thing...My dad was a Dentist, and we had a great middle class life(Didn't realize it till later on..), but he was super frugal. 1960's carpets until the 90's, smaller home, no debt, older cars...never new.   He passed almost 2 years ago and 3 things will always echo in my head that he said.

#1 Money does not buy happiness, but it gives you choices and opens up doors  that many others do not have.

#2 If you save your money for a rainy day, and that day never comes, you are very very blessed.

#3 People with money will most assuredly live longer(Can afford best health care), look better (can afford best foods and gym memberships) , and live less stressful lives(No money worries) then ones that do not have it.

Man he was right.  

I know your reading this Dad...thanks.


FreedomGuy's picture

I started at 90 cents an hour when I was 16. I worked at a lumber yard which was sort of the precursor of today's Home Depot. It was lumber and hard goods like nails, sackcrete and we had a paint department where I learned how to mix paint. I got a raise after a month and I think I maxed out at about $2.00. I was just doing summer work and part time work after school. I loved it. It was physical work but I felt like a real working guy. I worked with guys who were a mix of ages. One named Carl was a nice guy, good at his job but just above Forrest Gump on the IQ scale. I am not sure what they earned but I doubt it was more than $5/hr. Yet, you could live humbly.

The myth about wages, minimum or otherwise is that there is something called a "living wage". Baloney. There are people who make the equivalent of $2/day around the world. It is amazing they are not all dead, right? The reason is that in all economies costs and wages must balance. They must. There is no other way. The reason is that trade must occur to survive and so everyone in the trading chain adapts to costs.

When minimum wage was $1/hr in the U.S. everything was priced proportionately. I suspect analysis might even show that purchasing power was proportionately higher in those times.

Only governments through use of force can screw up this balance and screw it up to where people starve, aka "Cultural Revolution". People do not starve themselves and contractors do not build homes no one can afford. They would not sell any. However, government could drive up the prices of all materials, property and labor to where it is only proftable to build very expensive homes. This is what you see.

The minimum wage game is hunting snipes. You can never get ahead with it. It is just good for political sound bites and votes from the economically illierate.

daveO's picture

Right. Before my grandad retired in the early 80's he and his coworkers in a warehouse had figured out that they were earning the most take home pay in the mid-1960's after accounting for inflation, not to mention taxes. The guy never went past the 6th grade and understood the debt slavery that Nixon had sold us all into. The country has become too stupid to survive.

FreeShitter's picture

money wasnt our god like it seems to be now....

Takeaction2's picture
Takeaction2 (not verified) Seasmoke Mar 6, 2016 12:15 PM

One of my earlier jobs was at Chuck E Cheese and the minimum wage was $3.10  and when you received your 6 month review, those fucks made you feel incredible with a .10 cent raise.  They were wizards at keeping slaves happy and loyal using mind tricks.  I am reading one of those books right now.  And if you have have got to read this...  This book is absolute GENIUS. (NOTE I have no affiliation with this book just reading it)

Son of Loki's picture

I hear ya. My first job was a gruesome janitor for a funeral home. That job and the undertakers there, as well as the corpses, taught me more about the philosphy of life then anything else at a very early age. It's the stuff that ain't in the books anywhere. Physically it was not hard but mentally, it was very heavy lifting...alot to think about. And it's true...the people who worked there all their lives as a full time job were very macabre.

Then I was lucky and landed a non-union job on the docks as a stevadore making very good money but the work was hard as hell. No need for a gym or aerobic workouts, no need for bikram yoga or tai chi and I skipped the pilates classes and saved my money.

undertow1141's picture

GAllon of gas then was 75 cents too.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Seasmoke Mar 6, 2016 4:12 PM

$3.10 an hour is what my first real job paid. Before that I had already picked berries for $1 a flat and did babysitting on the weekends for $1 an hour. Not to mention when I agreed to work for $2 an hour (which often included a hot farm lunch or breakfast) in return for learning how to train horses from a local breeder and trainer or the time when I worked on an organic farm for a $60-a-week stipend in order to learn the various skills that were necessary.

Minimum wage is overrated and there are ways around it. Both for people that want to learn a useful skill and for those unable or unwilling to pay labor at the government-approved rate.

Takeaction2's picture
Takeaction2 (not verified) HRH of Aquitaine Mar 6, 2016 10:28 PM

HAHA...I picked berries.  They gave us 10 cents a pound here in Oregon.  Talk about slave labor.  I was around 11 years old...a hard days work might of netted 10 or 12 bucks.  Covered in dirt, hands stained and poked from the black berries.  We would tie a tin can around our waist and off to the fields my friends and I would go......once in a while putting a few rocks or dirt clods in the bottom of our flat to make an extra dime here nad there....LOL

undertow1141's picture

Assembled bikes and stocked shelves for Toys'r'us for $4.25/hr, mowed 6 yards on the weekends($5 each) and babysat anytime my neighbors asked. The two boys would run over a female sitter, I had them playing football in the back yard til they collapsed. Parents never could figure out how I had them knocked out asleep but the girls would be a wreck in tears.

But today I just remember it was white privilege and not the fact I busted my ass that bought my gas and car at 16.


edit: I applied for 75 jobs before I got the bike gig. Privilege was in full effect.