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PolitiFact Oregon was easing into a new week, excited about the warm weather, when this tweet came over to shatter our calm: #Unemployment for #Oregon HS grads 18-20 jumps 300% compared to 30% nationally.
It was a tweet from the Cascade Policy Institute, a think tank in Portland that advocates limited government. A research associate there had written a post called "Oregon’s Minimum Wage Prices Teens Out." Here’s a fuller explanation from the website:
"Oregon’s unemployment among high school graduates aged 18 to 20 tops the national charts, with a rise of more than 300% from 2008 to 2011. This gigantic leap dwarfs the U.S. unemployment rate for the same demographic, which only shows an increase of around 30%." (Cascade later revised the claim to reflect a 200 percent increase.)
How could we find out if this was all true? Does Oregon top the national charts? Was the increase in Oregon really that much worse than the national increase? And what about the underlying point: That Oregon’s minimum wage was to blame? The original post contained no links and -- more significantly -- no unemployment numbers, so we had little to go on. We put in a call to Cascade.
A little background here for those unfamiliar with opposition to Oregon’s minimum wage. Oregon has the second highest-minimum wage among states, $8.80 this year, second only to Washington, at $9.04. What really annoys critics is that the wage automatically goes up every Jan. 1, as it is indexed to inflation. Voters approved the automatic indexing in 2002. Restaurants and small businesses hate it and argue that a high minimum wage hurts teen employment.
So it makes sense that Cascade, which sides with free market principles, is among those critics. We spoke with Steve Buckstein, the group’s senior policy analyst. In doing so, Buckstein corrected the original write-up to reflect a 219 percent increase, and not a 300 percent increase, in Oregon’s 18-20 unemployment rate. He said the general argument still stands.
"We have a very high minimum wage, and it makes it harder for teens and unskilled workers to get jobs," Buckstein said.
Basic starting point: What are his numbers and where did he get them? Cascade turned to the Employment Policies Institute, a business-backed Washington, D.C., group that also dislikes the minimum wage. The institute even runs a website called MinimumWage.com.
Michael Saltsman, a research fellow there, used Current Population Survey figures (which are compiled by the U.S. Census and used by the U.S. Bureau of Labor Statistics) to figure out unemployment for high school graduates 18 to 20.
Here are the numbers: In 2008, unemployment in Oregon was 11.1 percent. By 2011, it was 35.4 percent. That is a 219 percent increase. The U.S average was 18.3 percent in 2008 and 24.5 percent in 2011. That is a 34 percent increase.
We were struck by two things in the data: The high 35 percent rate in Oregon in 2011, but also the low 11 percent rate in 2008. We were doing better than the national average five years ago. Obviously if we go from lower-than-average to higher-than-average, we’re going to get a larger-than-usual increase. That made us see the 200 percent increase in a new light.
We then checked with the Oregon Center for Public Policy, another local think tank, but on the other side of the issue. Executive director Chuck Sheketoff suggested we try the Economic Policy Institute in Washington, which, unlike the Employment Policies Institute, supports raising the minimum wage.
Economic analyst David Cooper shared his unemployment rates for the same age group, also using Current Population Survey figures. And you know what we found? The unemployment figures were different -- lower, generally, all around -- but the rates of increase were about the same.
In 2008, unemployment for high school graduates 18-20 years old in Oregon was 8.3 percent, compared with 13.4 percent nationally. In 2011, Oregon unemployment had grown to 25.4 percent, compared with 18.4 percent nationally. Those figures correspond with a 206 percent increase in Oregon, and 37 percent nationally.
Again, Oregon was doing better than the national average, before we did worse in 2011.
(Cooper also argues youth unemployment jumped dramatically "across the entire country, and particularly in the Pacific Northwest" between 2008 and 2011. The increase in Washington was 85 percent and in Idaho, 83 percent. Again, Oregon had lower unemployment than both states in 2008 but ended with slightly higher rates in 2011, which made the increase more dramatic.)
We checked with the U.S. Bureau of Labor Statistics, which provides the official unemployment figures, and Oregon’s Employment Department. We’ll spare you more numbers. Both agencies showed the same trend, albeit for slightly different age groups, education levels and years.
Clearly, the numbers went up. Is any of this tied to Oregon’s indexed minimum wage? People disagree on this. Obviously when employers are shedding jobs, they’re not hiring. And when they do start hiring, they often hire more experienced adults. There’s no question the recession has hit teens and other young workers hard.
But Nick Beleiciks, state employment economist, offers a different take on how unemployment intersects with a high minimum wage. Data show that teens in Oregon are more likely to look for work than teens across the country, he said. That’s called a participation rate.
"Oregon has a higher participation rate and that could have to do with the higher minimum wage and because of that higher participation rate, we do have a higher unemployment rate among teenagers," he said.
Buckstein argues that the high unemployment rate has to do with younger workers looking for jobs in a limited market, and not getting those jobs because they’re losing out to more experienced workers. Of course, neither explanation addresses why our rates were lower than the U.S. average in 2008, which was after Oregon voters approved indexing the minimum wage to inflation in 2002.
We won’t rule on that argument. We’re sticking to the numbers. In case you’ve forgotten them, here’s a nifty table for easy review:
|Cascade 2008||Cascade 2011||percent increase||Eco Policy 2008||Eco Policy 2011||percent increase|
|Oregon||11.1||35.4||219 %||8.3||25.4||206 %|
|U.S.||18.3||24.5||34 %||13.4||18.4||37 %|
The rates of increase cited by Cascade Policy are correct, as measured by its numbers and the numbers of an ideologically different institute. We will give Cascade a pass on the original increase cited because, in this context, the difference between 219 percent and 300 percent doesn’t really matter.
The problem we have is we don’t think it’s fair to use the national average to highlight the apparently horrible nature of Oregon unemployment, without noting the actual unemployment figures. In every data set we checked, Oregon’s youth unemployment in 2008 was lower than the national average. Of course, the rate of increase will be higher when the starting point is lower.
We think the actual unemployment rates are an important missing detail that should be considered when looking at increases. We rate the statement Half True.
Cascade Policy Institute, "Oregon’s Minimum Wage Prices Teens Out," July 5, 2012
Interview with and emails from Ken LeVasseur, Chief Information and Analysis, Local Area Unemployment Statistics Program, U.S. Bureau of Labor Statistics, July 9, 2012
U.S. Department of Labor, Wage and Hour Division, "Minimum wage laws in the states," Jan. 1, 2012
Interviews with Steve Buckstein, Cascade Policy Institute, July 10, 18, 2012
Emails from Guy Tauer, Regional Economist, Workforce and Economic Research
Oregon Employment Department, July 9-10, 12, 2012
Email from Nick Beleiciks, State Employment Economist, Workforce and Economic Research
Oregon Employment Department, July 18, 2012
Employment Policies Institute, "New Analysis: As of April 2012, Teen Unemployment Up in 17 States and DC, Down in 32," May 25, 2012
Employment Policies Institute, "With First Day of Summer Approaching, New Analysis Finds Teen Unemployment Still Above 25% in 18 States and DC," June 15, 2012
Oregon Employment Department, "Recession's Lingering Effects on Oregon's Youth Employment," Jan. 6, 2012
Oregon Employment Department, "Key Workforce Challenges: Younger Workers Damaged by Recession," April 24, 2012
Emails from and interview with Michael Saltsman, Research Fellow, Employment Policies Institute, July 10, 16, 2012
Emails from David P. Cooper, Economic Analyst, Economic Policy Institute, July 16-17, 2012
Oregon Employment Department, "Oregon's Minimum Wage Will Rise to $8.80 Per Hour in 2012," Oct. 27, 2011
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