CBO: Blame millennial joblessness on ‘higher minimum wages,’ increased welfare

via Congressional Budget Office

via Congressional Budget Office

A new trends report generated by the non-partisan governmental Congressional Budget Office (CBO) identifies reasons for why more of America’s young men are ending up in prison or out of work. The number of young men who are either jobless or in jail has increased from 11 percent in 1980 to 16 percent in 2014.

The report, “Trends in the Joblessness and Incarceration of Young Men,” further explains “10 percent of young men were jobless in 1980, and 1 percent were incarcerated; those shares rose to 13 percent and 3 percent in 2014.” The experts diagnose the root causes of why this is happening, looking at economic, political, and educational changes in America.

The #FightFor15 protestors and Bernie Sanders voters won’t be pleased.

“Higher minimum wages may also have increased joblessness among young men,” the report says. “The federal minimum wage, adjusted for inflation, has not consistently risen since 1980, but there has been an increase in the number of state and local minimum-wage laws in recent years.”

Almost every day, a new locality is raising its minimum wage, despite the negative results in places like Seattle. This report largely confirms conservative economists’ analysis of the data: If you artificially raise wages, businesses who can’t afford the increase will cut jobs or go turn to robotic/kiosk technology in their place.

RELATED: Seattle sees largest 3-month job loss in history: Thank $15 minimum wage hike

Beyond the minimum wage, the report also lays some blame on federal spending policy, specifically welfare.

“[F]ederal spending on means-tested benefits—that is, cash payments or other benefits for people with relatively low income or few assets—increased substantially between 1980 and 2014, possibly reducing young men’s incentives to work,” it said.

Specifically during the recession, President Obama reversed many components of the 1990s-era Welfare Reform bill, extending unemployment benefits and reducing the requirements on those receiving benefits. Following the CBO’s line of reasoning, this could be one reason we saw a slow recovery from the recession.

While this may seem obvious to some, many in Congress have fought against a new round of welfare reform; instead of incentivizing people to stay out of work, they should be encouraged to go through education and job training programs. While the CBO cannot endorse solutions, this one seems obvious.

Many progressives have previously discounted studies and statistics proving increased joblessness from higher minimum wages and more welfare as biased, but it’s tough for anyone to refute the CBO. They aren’t funded by special interests and pride themselves on providing “objective, impartial analysis.”

Now that the CBO has helped establish the facts, let’s hope we can see more bipartisan movement on reforming our welfare system toward economic empowerment and enabling job creators to provide more jobs to young Americans.


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