Just as the class of 2007 prepares to make its way into the job market, the U.S. Labor Department reports that the unemployment rate among teenagers is three and one-half times the national rate, or 15.7 percent for May, up from 15.3 percent.

“To say that the unemployment rate is holding steady at 4.5 percent is misleading,” according to Jill Jenkins, and chief economist for the Employment Policies Institute (EPI). “It masks the fact that low-skilled labor is being forced out of the job market in response to the mandated wage increase.”

According to EPI, employment among high school graduates fell by 375,000 employees in May and high school dropouts employment declined by 2 percent.

“Anything that raises the costs of labor artificially is pricing these people out of the job market,” Jenkins said. “As employers labor costs rise, such as health care benefits, wages, they are cutting entry-level jobs, which makes it impossible for teens to become more skilled workers if they can’t get in the front door.”

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Jenkins said over time high school diplomas will become less valuable and we will begin to see fewer employed teens.

“For the Labor Department to say 157,000 new jobs were created in May but not identify if those jobs were high-or low-skill level jobs masks what is really going on in the labor market,” she said.

The outlook is still grimmer for blacks and high school dropouts. According to David Neumark of the University of California-Irvine, for every 10 percent increase in the minimum wage, employment for young black adults, teenagers and high school dropouts is cut by 8.5 percent.

Jenkins said with the expected minimum wage increase of 41 percent will result in a 35 percent job loss for this vulnerable population.

University of Maryland professor and economist Peter Morici said health care costs eliminate entry-level jobs.

“The minimum wage increase is not all that significant here on the East Coast,” Morici said. “It will have the biggest impact in rural and middle America. The problem employers here have is the high cost of fringe benefits. For them it will be hard to justify entry-level positions with health care costs so high.

“Unfortunately there are fewer and fewer opportunities low-skilled workers since we no longer have factory jobs that helped them to enjoy a standard of living. General high school education is no longer adequate preparation for a job in the globalized economy. You need specialized skills like a mechanic or medical technologist. A job paying $8 per hour equates to a salary of $21,000 a year; you need $50,000 to make it in today’s economy.”

rchappelle@baltimoreexaminer.com