Last week, University of Chicago economist Casey Mulligan argued that the relatively resilient summer hiring for teenagers shows poor political choices -- not a lack of jobs -- is responsible for high unemployment. I disagreed, writing that these new summer jobs are specifically geared towards teenagers and show a seasonal and temporary labor demand shift on the part of employers for young workers, while unemployed adults continue to face too few openings. Mulligan responded this week to such criticisms by attempting to show that labor supply is mostly what has changed since all the kids are out of school -- not the demand of employers. I still don't think his argument makes sense.
First, he shows a chart that shows bigger employment spikes for workers ages 16-19 more than those 20 and over in the summer and so does employment. Well yeah -- nobody would really dispute that. High schools and college kids are out of school and want to make some extra money. That's obvious. But then he then provides another graph showing a small spike in summer unemployment for workers of 20 years of age and concludes that the teenagers instead of those adults because they want them more than the adults do. He says:
When school lets out, students storm into the job market and jobs are created for most of them. A few students spend some of the summer unemployed because students, and not their employers, are the ones who suddenly decided that summer is the time when they are available to work. That's why the summer unemployment spike is positive -- unemployment per capita for these groups is greater during the summer than during the academic year, especially for the groups with more school enrollment.
This doesn't make sense to me. According to Mulligan's logic, if the unemployed adults stormed the job market, then jobs would be created for them too. I wish Mulligan was right; I really do. But this just doesn't jive with empirical observation. As I noted in my prior post on this subject, summer employment for students is a very different labor market than that for adults. It's easy for a company or proprietor to employ a student at minimum wage knowing it's a temporary situation. Benefits are almost never expected or provided, and the kids have no expectation of job advancement -- just to make some spending money for a few months. That contrasts starkly with the jobs unemployed adults seek.