Ted Dabrowski
Vice President of Policy

Lawrence J. McQuillan, PhD
Chief Economist

John H. Klingner
Research Assistant

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The problem
Only 27 percent of teens in Illinois had jobs last year – the lowest Illinois teen employment rate in the 42 years this data has been collected. The figures were worst for African American teens in Chicago, where only 10 percent had jobs.

As the graphic shows, the Great Recession clobbered teens with higher unemployment rates, fewer employment opportunities and fewer hours worked – a perfect storm.

But another obstacle hurting teens is Illinois’ minimum wage of $8.25 an hour, which is fourth-highest in the nation and a dollar higher than the federal minimum wage.

With an hourly minimum wage of $8.25, employers will hire whoever can produce the most output for that amount. When teens are competing with adults for minimum wage jobs, teens will be passed over for the job in favor of workers with more experience.

Unfortunately, lawmakers in Springfield are advancing plans to put thousands more teens out of work. Illinois Senate President John Cullerton sponsored a bill (Senate Bill 1565) to increase the minimum wage to $10.25 an hour by 2015, a 24 percent increase. Illinois would then have the highest minimum wage in the nation.

An econometric simulation reveals that SB 1565 would result in an Illinois teen employment loss of 10,576.

This job-killing bill passed the Senate Executive Committee. Provisions to increase the minimum wage could be added to any existing bill when the Legislature reconvenes in November.

The solution
The federal government and Illinois should abolish the minimum wage.

Why it works
Abolishing the minimum wage would quickly boost teen employment in Illinois, allowing teens to get the work experience and on-the-job training they need for future career advancement. Parents should support these goals.

With wage flexibility, any teen who wants to work will be able to find employment in the long run as labor markets clear, leaving only normal “churn” unemployment as people naturally move in and out of jobs. More productive workers will command a higher wage as employers compete for their greater skills and talents.

Download the full report
Download the one-page Policy Point