The Impact of Nebraska’s Minimum Wage Increase on Teen Employment
For many young people, earning their own money is a gateway to independence, yet the journey isn’t merely about the paycheck. It’s also about acquiring skills, such as customer service and responsibility, which are crucial for future success. This perspective underscores the significance of entry-level jobs, an area recently scrutinized by the Employment Policies Institute (EPI).
At the height of the summer job season, EPI, a public policy research group, released a report suggesting that Nebraska’s increased minimum wage has negatively impacted the job market for teenagers. This report comes amidst state officials celebrating one of the lowest unemployment rates in the nation.
According to EPI, the unemployment rate for teens in Nebraska soared to 9.35% in May 2026, coinciding with the implementation of a higher state wage rate voted in through a 2022 ballot initiative. The Virginia-based institute, which has ties to business groups opposing wage increases, claims this rise in unemployment is linked to the wage hike.
Despite a nationwide drop in unemployment across all age groups, Rebekah Paxton, EPI’s research director, stated that “teen unemployment in Nebraska has increased much more rapidly.” She added, “This lines up with what economists have been saying for decades, that wage hikes hurt teen unemployment prospects.”
However, not everyone agrees with EPI’s conclusions. Ken Smith, an economist with Nebraska Appleseed, argues that EPI lacks “credible evidence” to directly connect the minimum wage increase to the rise in teen unemployment rates.
The EPI’s analysis coincides with Omaha and Lincoln city councils’ decision to establish their own minimum wage of $15 per hour. These local ordinances aim to counteract state legislative efforts to lower voter-approved pay levels. The Nebraska Attorney General has initiated legal action to challenge these city measures.
Despite differing opinions on the wage increase’s impact, there is a consensus on the importance of teenagers gaining work experience. In June 2026, the US Census Bureau reported 71,189 young Nebraskans, ages 16-19, were employed.
To reach its conclusions, EPI calculated the 12-month rolling average of teen unemployment rates, a method Paxton believes captures trends more accurately than raw data, which can vary significantly.
Ansley Fellers, Executive Director of the Nebraska Grocery Industry Association, noted that the findings reflect anecdotal evidence she has encountered. “You’re actually seeing folks make the difficult decision of choosing not to hire them,” Fellers said. She explained that rising wages have altered hiring dynamics for food stores, leading to tough decisions about labor and store hours.
However, Smith from the Appleseed Center challenges the EPI’s conclusions, arguing that they drew stronger inferences than the data supports. “They didn’t even try to separate the effects of raising the minimum wage from everything else happening in the economy, particularly in an ag economy, a war, and tariffs. A credible analysis would have accounted for that,” he stated.
While Paxton acknowledged external economic pressures in Nebraska, she maintained that if teen unemployment is growing faster than overall unemployment, the state’s wage hikes might be worsening these economic challenges.
Data analysts consulted by Nebraska Public Media News also questioned the EPI findings, noting that the US Census American Community Survey has consistently shown Nebraska’s high labor force participation rate. Despite this, teens aged 16-19 still face the highest unemployment rates among those under 35. Interestingly, recent Census data from early summer 2026 indicates the highest levels of teen employment in Nebraska since 2021.
