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Minimum wage is set to increase from $6.55 an hour to $7.25 on July 24th. The Wall Street Journal article “Mandating Unemployment, congress prepares to kill more jobs”, from July 13, 2009, raises the question of who this raise will benefit, and who it will hurt. According to the article, David Neumark, an economist from University of California, Irvine, believes “the 70-cent per-hour minimum wage hike this month would kill ‘about 300,000 jobs for those between the ages of 16-24’”. As of June, 2009, 24% of American teens are already unemployed.
This is the age where the 64% of Americans that graduate high school and start their college careers are saving money, paying tuition, or paying off loans for college. Over the past year, there have been increases in college tuition across the board, with Public Two-year colleges seeing a 4.7% increase from last year, Private four-year college tuition prices up 5.9 %, and Public four-year colleges seeing the highest increase at 6.4%. The recent rise in college tuition, coupled with the rise in minimum wage, means we could see the percentage of Americans that graduate with a bachelors degree, 29% in 2007, decrease. According to the 2007 article from the Olympian, 35% of college students leave their schools before graduation because they are not “equipped to attend”; most are simply not able to “foot the bill”. The loss of 300,000 jobs for the 16-24 age group comes at a time when the future of the financial aid system is “uncertain”, leading to the concern that the number of high school grads that endeavor to attend college will be limited by their ability to pay.