Data show high joblessness for Nevada teens

Unemployment remains high across Nevada, but the lack of work has fallen especially hard on the Silver State's teenagers.

New numbers from the Bureau of Labor Statistics show that Nevada tied for second in the nation for teen unemployment in April, with 34.5 percent of people ages 16 to 19 looking for a job unable to find one. That compared with a national average of 24.2 percent. Include teens discouraged and no longer looking, and statewide joblessness in the age group rose to 36.2 percent in the month.

And Friday figures from the state Department of Employment, Training and Rehabilitation showed that Nevada employers hired 12,500 14- to 18-year-olds in the second quarter of 2010. That was down from 35,200 hires in the second quarter of 2006. Second-quarter data aren't yet available for 2011, but Bill Anderson, chief economist of the employment department, said it's likely teenagers will continue to have a hard time finding work.

"Given expectations for weak job growth on the whole this summer, competition for traditional summer jobs will be extremely tight," Anderson said.

That poor hiring climate is a problem because kids who miss out on working also miss out on developing lifelong soft job skills, such as learning to accept guidance gracefully, or to call in when they're sick instead of just not showing up.

"A job is more than a paycheck. Some people call it an invisible curriculum," said Michael Saltsman, a research fellow at the Employment Policies Institute, a nonprofit research group in Washington, D.C. "It's what you get from learning to report to a manager, working with customers and assuming the responsibilities that come with that first job. Teens who don't have that are taking a step back, and they'll be at a disadvantage relative to their peers who have experience."

Plus, research shows that those who don't work as teenagers make less money over a lifetime than do others because wages are based in part on experience, and less experience means smaller paychecks.

"An entry-level job is the first rung on the career ladder,'' Saltsman said. "Teens who have a spell of unemployment are at greater risk of earning a lower wage and seeing more unemployment later.''

Because early job experience is so important, experts say it's essential to address high teen unemployment. But finding solutions requires an understanding of why today's teens can't find work.

STIFF COMPETITION

For starters, the economy is still struggling, with unemployment at 9.1 percent nationally and 12.1 percent statewide. Throw in discouraged workers and underemployed part-timers who'd rather work full-time, and those rates jump to 15.7 percent and 23.7 percent, respectively. That means stiff competition from experienced or skilled adults willing to take hourly restaurant and retail jobs -- positions that go to high school and college students in better times.

"The reality is, unemployment is high for everybody, and more people are looking to fill roles that may have traditionally been filled by teens," said Amanda Richardson, senior vice president of product and marketing for SnagAJob, a Virginia-based job-search website that specializes in hourly positions. "It's definitely putting pressure on the teen job market."

Jeff Waddoups, a professor of economics at the University of Nevada, Las Vegas, also noted that teens tend to lack job skills, and unemployment is generally high for the unskilled. Numbers from the Bureau of Labor Statistics show that unemployment in 2010 was 14.9 percent nationwide for people with less than a high school diploma, and 10.3 percent for people with only a high school diploma. For the college educated, unemployment ranged from 1.9 percent for people with a doctorate to 5.4 percent for workers with a bachelor's degree.

"Firms like to keep skilled workers. They're more productive, and firms have spent a lot of time and money to develop skilled workers,'' Waddoups said. "When things slow down, they're hesitant to let their skilled workers go."

WHEN MINIMUM IS TOO MUCH

But rising labor costs share at least part of the blame for high teen unemployment, Saltsman said.

The nation's minimum wage has risen 41 percent since 2007, from $5.15 to $7.25. In Nevada, one of about a dozen states with a minimum wage higher than the national rate, minimum pay has jumped 60 percent since 2006, from $5.15 to $8.25 for uninsured hourly workers. (For hourly workers with employer-sponsored health insurance, the state's rate equals the national rate.) The minimum-wage gains far outstrip broader pay trends, which have been flat.

Employers have responded to higher minimum wages in three ways: They've replaced their lowest-skilled workers with technology -- consider self-checkout grocery lines -- and they're making higher-paid workers do more, such as restaurants asking waiters to bus their own tables. They've also gravitated toward more experienced workers. All of those approaches displace teens, Saltsman said.

"If an employer has to pay more, it makes sense to hire someone who requires less training and who can come in and start the job right away," Saltsman said.

Waddoups agreed that the higher minimum wage could be contributing to persistent teen unemployment, but he added that it's not the biggest hurdle to finding work.

In 2001, teen joblessness averaged 14.7 percent nationwide, compared with average joblessness of 4.7 percent for workers of all ages, according to the Bureau of Labor Statistics. That's roughly proportionate to today's spread between 24.2 percent teen joblessness and 9.1 percent overall unemployment, Waddoups noted.

"The teenage unemployment rate is always higher. It's just harder for unskilled workers to get jobs. That's always going to be the case," Waddoups said. "Not only that, but teenagers aren't quite as stable. They haven't figured out what they want out of life. We're going to find that the unemployment rate for teens is higher until they change the way they behave."

But Waddoups and others say a few policy prescriptions could help get teens off of the family room couch and into the work force.

A CALL FOR INTERVENTION

An April report from the Center for Labor Market Studies at Boston's Northeastern University called for "massive new summer jobs intervention" at the federal level, noting that 2010's cut in funding for federal programs that pay state and local agencies to hire teens led to a sharp drop in employment among low-income kids, in particular.

But Saltsman said businesses were willing to hire teens in the past without a government subsidy. Instead, he suggested that lowering the minimum wage and replacing the lost pay through an earned-income tax credit would encourage employers to hire.

Saltsman also suggested a tiered system that would allow employers to pay lower "training" wages to teens.

Several states, including Arizona, Maine and Missouri, have considered training wages, and Illinois and Michigan already set lower minimum pay for teens. Illinois and Michigan still rank in the top 25 for teen joblessness, according to Bureau of Labor Statistics data, but their rates -- 25.8 percent in Illinois and 28 percent in Michigan -- are substantially lower than Nevada's.

Saltsman said current training wage laws come with caveats and strings that make them less effective than they could be. In Illinois, for example, the training wage is good for only 90 days.

Asked if reducing or eliminating the minimum wage would create a race to the bottom in pay, Saltsman said anecdotal evidence shows it wouldn't.

The vast majority of workers already earn more than the minimum, he said, noting that McDonald's offered $8.50 an hour when it hired 50,000 workers nationwide on April 19.

The best fix for the problem, Waddoups said, is to boost demand for labor. Improved jobs activity could come from either tax credits for small businesses that hire teens or direct government spending on jobs created by public programs.

Either way, Waddoups hopes for answers, not just as a labor economist, but as a dad. His 18-year-old son is looking for something to do before he heads off to New York University in the fall.

"I just hope we can find a way to solve the problem so my son can get a job," he said.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.

SCRAPING FOR JOBS
Nevada ranks high among the states for unemployment of teens ages 16 to 19:

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Comments

Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.

1. reader_in_colorado Jun. 19, 2011 | 6:29 p.m. Report Abuse

   Put those teens to work driving busloads of illegals back to Juarez. Kill two birds with one stone. It's a myth that illegals only do jobs that Americans don't want. Ship the illegals back to the border and watch the nationwide unemployment rate drop to normal overnight.

2. Ted Stein Reload Dept. Jun. 19, 2011 | 2:27 p.m. Report Abuse

   never hire a boy for a mans job. same for the girls too. they have no shot, its tough. they should stay in school and get a proper education instead of trading hours for dollars. then in 20-30 years we would have a smarter State and people like Reid wouldnt even be on the ballot!!!!!!!!!!!

3. mark_schaffer Jun. 19, 2011 | 12:49 p.m. Report Abuse

   Why hire some no-talent teenager when a no-talent illegal will do a better job for less and without the snotty attitude?

4. William Jun. 19, 2011 | 10:15 a.m. Report Abuse

   Higher unemployment rates among Nevada Teenagers is a direct result of Nevada's Minimum Wage laws. This will continue to have a detremental affect on our Society as teenagers are "taught" not to work.
   
   According to Noble Prize winning economist Milton Friedman, “There are no positive objectives achieved my minimum wages. It’s real purpose is to reduce competition with the trade unions.”
   
   "The well intentioned ‘do-gooders’ think that raising the minimum wage helps low wage earners. According to Friedman, the opposite occurs. What you do when you raise the minimum wage is to ensure that those whose skills are not up to the new rate will become unemployed."
   
   "The market, if allowed to set wages, will maximize the total number of jobs. That is due to the laws of supply and demand. It works for labor just as any other product or commodity. The number of jobs will be adjusted by the rate the market will bear. Raise the minimum wage and you will see a reduction in the lowest paid jobs."
   
   http://capitalismandfriedman.wordpress.com/2009/06/19/milton-friedman-on-minimum-wage-laws/

5. Joe.Blow Jun. 19, 2011 | 9:57 a.m. Report Abuse

   Nevada is a sanctuary state ( thanks to harry reid ) with these numbers proving that they take jobs away from our teens.....The very jobs they need to get a good start in life...Building a good work ethic and so on..

6. Leonard.Marciano Jun. 19, 2011 | 9:46 a.m. Report Abuse

   Nevada's two tier minimum wage is hurting teens, families who wish to supplement their incomes, those on fixed incomes and those with low incomes.
   Small businesses can't afford to hire workers at $8.25 for part-time work and they can't afford to offer health care and pay $.7.25.
   
   The first step to helping reduce the high unemployment is for the Nevada State Legislature to eliminate the two-tier system-something they should have done this past session.

7. J.Lee Jun. 19, 2011 | 8:13 a.m. Report Abuse

   Look at who is working the jobs that used to be "summer jobs" for teenagers. These jobs have been taken by uneducated immigrants and turned into career jobs instead.

8. Lets Make Sense Jun. 19, 2011 | 7:32 a.m. Report Abuse

   Want to make more jobs and get the kid off the street so that they can learn a skill in the job sector. Reduce the minimum wage
   and more youth will get jobs. Its just not worth bringing in
   youth and have to teach them how to wipe their nose. As soon as
   they can show they are worth it they will get a higher wage.