School’s out soon, and for many high schoolers and college students in the Land of Enchantment, that means it’s time to start looking for summer work.
Unfortunately, as the Legislative Finance Committee recently noted, in February, “for New Mexico job seekers 16 years to 19 years old, 21.2 percent were unemployed, and for those 20 years to 24 years old, 10.4 percent were unemployed.” The rates were “far higher than the national averages of 14.4 percent and 6.8 percent, respectively.” Youth joblessness in New Mexico is “disproportionately greater than total unemployment compared with the rest of the country.”
The LFC observed that when it comes to matching young adults with employers, labor bureaucrats are remarkably inept at their job. “During the previous two fiscal years, local workforce boards served 770 youth and 856 youth, respectively, and are on track to serve in the low 800s in the current fiscal year, far below the target of 1,400.”
Unsurprisingly, the LFC recommended that the state “start to focus more resources towards employing youth and building a step-up system so that once youth attain employment they do not quickly become unemployed.”
Or the state could study Econ 101.
Cowed by the pols who look to it to provide data to confirm their policy preferences, the LFC didn’t mention the role minimum-wage mandates play in driving youth joblessness. According to the Mercatus Center’s Jack Salmon: “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.”
Immediate impacts are significant. But artifically inflating pay beyond market levels has consequences years — if not decades — down the road. Tim Worstall, of the Adam Smith Institute, explained that by “making it harder for low-skilled workers to obtain an entry-level position, the minimum wage may perversely hinder the development of human capital and harm the longterm career prospects of the very people it ostensibly helps.”
The chart below depicts New Mexico’s minimum wages by jurisdiction.
No, minimum-wage mandates aren’t the sole cause of youth unemployment in New Mexico.
But they’re a major contributor, and the LFC is committing dereliction of duty by ignoring economist Mark J. Perry‘s wisdom:
The most disadvantaged Americans don’t need the alleged compassion of minimum wage advocates as much as they need entry-level jobs. And to maximize entry-level jobs, economic science tells us that we should allow market forces, not government bureaucrats and politicians, to determine wages in the labor market.