Today's youth unemployment statistics are worrying, no doubt about that. Tim Worstall is pointing the finger of blame for squarely at the door of the minimum wage, I thought I'd take a look at the historic data and see what it shows.
The data in question can be found here (Specifically, Table 9, Datasets: YBVQ,YBVR,YBVS)
It's a bit of a short cut because the data is only for 18-24 year olds, so doesn't include 16 and 17 year olds, but I think it's close enough. In addition to the data for youth unemployment I've also included the data for the minimum wage and adjusted for average earnings. We can only go back as far as 1993, but this is a reasonably good time period since A) We were recovering from a recession and B) We didn't have a minimum wage.
So, here's a graph of the results:
So what conclusions can we reach from the dat, well since we can't see the 80's we unfortunately can't really prove anything on my preferred "it was Thatcher, Neoliberalism and Globalisation" line of reasoning. We can however see that there's not a huge amount of difference between the non minimum wage nineties and the minimum waged noughties, the latest figure is a little higher than the 90's figure but this could be put down to the greater severity of the recession and the current set of cuts.
There is one potential bit of support for the anti minimum wage argument in all this data, that is the rise in youth unemployment after 2004, this rise occured against a background of above average increases in the minimum wage despite the otherwise benign economic conditions. Unfortunately there's anther huge variable that throws a gigantic spanner in the works and that's that 2004 was the year that ten new eastern european nations joined the EU. While it's an acceptable argument that the minimum wage might have put employers of hiring, it's also quite reasonable to argue that employers hired foreign workers in preference to unskilled domestic workers.
All we can really say from the data is that if the minimum wgae had an affect on youth unemployment, the effect was not particularly signifigant. While the data may in parts indicate a relationship, it could easily be explained by other factors. All in all, I personally don't think the minimal benefits we'd see are worth the massive social costs.