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Experts predict another mediocre jobs report tomorrow which would -- the unemployment rate stuck at nine point 1%.
That's almost two percentage points higher than when the president's stimulus plans went into effect but that doesn't tell the whole story the unemployment rate among the youth.
Is even higher you're ready for this a staggering eighteen point 4%.
Could minimum wage laws have something to do with it professor Dan Demeco of -- University joins us now professor it's always a pleasure.
Welcome back -- -- credit -- what will define -- as as folks in the eighteen to 21 year range.
So most of them are a lot of them are out of school certainly this time a year ago the government jobs why is unemployment so -- why is it over 18%.
Amongst the out.
We economics is pretty clear on this judge when you increase the minimum wage it causes unemployment.
The reason for this.
Is it it is because you're creating a price control you're making it to that employers can't afford to employ people who only earned them revenues less then what the minimum wages.
The question is who gets -- -- first and obviously that's going to be low skilled and ethnic -- minority so high school dropouts and blacks.
Well but but don't these.
Doesn't the left.
Which claims to want to -- strengthen labor laws in order to protect -- the poorer in order to protect the unskilled.
Understand that every time they way they raise the minimum wage they're actually creating unemployment amongst the folks they claim -- helping.
Well I think there's probably two groups that we'd be talking about one would be sort of ignorant to the basic economics and think that they can actually improve social conditions by legislating it.
Which I think is false but the second group is the people who systematically benefit from the minimum wage which is basically everyone is tied to labor unions.
Increased minimum wages and higher unemployment rates make it so that.
Being a union member is more opportune and -- unions gain power and and bargaining potential when unemployment rates are higher or what would happen if there was no minimum wage.
And if employers were permitted to bargain with young people -- -- jobs -- young people were permitted.
To bargain with employers let's say.
Vol free market set affair with -- like is that case -- almost everybody else would more people have jobs would there be more economic activity would there be blocked a general increase in prosperity across the land.
I think -- be an improvement but I think that the minimum wage is just one part of a basket of failed policies that contribute to our current unemployment.
I mean we're subsidizing jobs that our young people aren't necessarily well suited for.
We're also subsidizing an education system that doesn't necessarily prepare them for work.
And add on to that as far as ethnic minorities are concerned were kicking them while they're down with the drug war.
When when young people are unemployed during their youth realize I'm repeating -- young and youth does not harm them in the long run.
With respect to their future -- ability.
Well especially when we're talking about young African American man I mean that the biggest sort of opportunity cost to being unemployed is is the likely potential.
Gaining wealth by means of of the drug trade and when you have that sort of criminal record.
I mean it becomes very difficult to get a job continuously and people start to infer that not having a job means that you have a criminal record or spend time in prison -- professor Dan Demeco thanks very much for joining us.
Thanks to its new secrets were --
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