Getting a college degree isn’t what it used to be. Since the Great Recession unemployment among America’s college grads has risen from 10% to over 13%, and according to King’s College economists Brian Brenberg and Jared Pincin this picture will remain a bleak one for some time.
Brenberg and Pincin put the blame squarely on two bad public policies which are causing labor costs to rise and limit employment opportunities for our young people: ObamaCare and proposals to increase the minimum wage to $9 an hour.
Several of the law’s [ObamaCare’s] rules have yet to be written, leaving employers unsure about what lies ahead in terms of requirements and costs. Many businesses are unclear about whether their existing insurance plans will qualify and how much their premiums will change.
According to the Federal Reserve, these uncertainties are leading businesses to lay-off workers and curtail hiring. Bad news for college grads entering the job market.
Recent proposals to raise the minimum wage to $9 per hour would also dampen job opportunities for recent college graduates. In fact, since 2002 the number of college graduates earning the minimum wage has increased by 70 percent.
No matter how “well intended” a public policy may be, these kinds of pressures distort the free market and have consequences. As Brenberg and Pincin go on to point out the real solution to improving the job market for America’s young people is to embrace economic freedom and to “leave more economic decisions in the hands of private individuals and businesses.”